Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

PRIVATE BILLS [Lords] (Standing Orders not previously inquired into complied with),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, and which are applicable thereto, have been complied with, namely:

Gloucester Corporation Bill [Lords].
Bermondsey Borough Council (St. Olave's Garden) Bill [Lords].
Blackpool Improvement BILL [Lords].

Bills to be read a Second time.

PROVISIONAL ORDER BILLS (Standing Orders applicable thereto complied with),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bills, referred on the First Reading thereof, the Standing Orders which are applicable thereto have been complied with, namely:

West Hartlepool Corporation (Trolley Vehicles) Provisional Order Confirmation Bill.
North and South Shields Light Railway Provisional Order Confirmation Bill.

Bills to be read a Second time Tomorrow.

PROVISIONAL ORDER BILLS (no Standing Orders applicable).

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bill, referred on the First
Reading thereof, no Standing Orders are applicable, namely:

Land Drainage Provisional Order Bill.

Bill to be read a Second time Tomorrow.

Middlesex and Surrey (Thames Bridges, etc.) Bill (King's consent signified), Bill read the Third time, and passed.

Governments Stock and other Securities Investment Company Bill [Lords],

Read a Second time, and committed.

Oral Answers to Questions — MERCANTILE MARINE.

DIRECTION-FINDING SYSTEM.

Mr. DAY: 1.
asked the President of the Board of Trade whether any decision has been arrived at by his Department, in conjunction with the Air Ministry and Trinity House, with reference to the question of establishing an experimental station for the purpose of introducing experiments into the wireless loop direction-finding system?

The PRESIDENT of the BOARD of TRADE (Sir Philip Cunliffe-Lister): I would refer the hon. Member to the reply which I gave to the hon. Member for Anglesey (Sir R. Thomas) on the 27th March, a copy of which I am sending to him. This question is still under consideration, but I hope that a decision will be reached on it very shortly.

PILOTAGE CHARGES.

Sir ROBERT THOMAS: 2.
asked the President of the Board of Trade whether he will set up a Government inquiry into the high charges for pilotage in most ports of the United Kingdom?

Sir P. CUNLIFFE-LISTER: Pilotage charges are frequently under review by the various local pilotage, authorities, with whom, under the Pilotage Act of 1913, rests the initiative with regard to any revision of the charges. I do not think a general inquiry would be useful.

Lieut.-Commander KENWORTHY: Does the right hon. Gentleman subscribe to the description in the question of the
charges for pilotage as high; and is he aware that pilots have to work extremely hard for very little more than they were receiving before the War?

Sir P. CUNLIFFE-LISTER: All these ancillary considerations show how wide is the procedure necessary for dealing with each pilotage case on its merits.

LIGHTHOUSE ADMINISTRATION.

Sir R. THOMAS: 3.
asked the President of the Board of Trade whether the committee appointed to inquire into the present system of lighthouse administration, under which shipowners have to bear the whole cost of the service, has yet reported; and, if not, when it may be expected to do so?

Sir P. CUNLIFFE-LISTER: I would refer the hon. Member to the reply which the Parliamentary Secretary gave him on the i3th March, that certain questions connected with the administration of the lighthouse service were being discussed with representatives or shipowners. These discussions are still proceeding. No committee of inquiry has been appointed.

Sir R. THOMAS: When are these discussions likely to terminate, and when may we expect the result, to be made known?

Sir P. CUNLIFFE-LISTER: I cannot say with certainty. I know that the representatives of the shipowners and of Trinity House have been dealing with the subject very fully, and I expect that we shall have a report from them in due course.

Mr. KELLY: When the right hon. Gentleman receives that report, and is giving it consideration, will he have regard to the position of the man engaged in the lighthouse service?

Sir P. CUNLIFFE-LESTER: I think the hon. Member knows that it does not rest with the Board of Trade to deal with the lighthouse services. These services have been vested by Parliament in Trinity louse and the Northern Lights Commissioners.

Mr. KELLY: But seeing that the financial control is vested in the Board of Trade, will the right hon. Gentleman see to it that these bodies are riot cribbed or confined in their expenditure, in order that wages may be cut down?

Sir P. CUNLIFFE-LISTER: I must decline to accept responsibility for a service for which, by law, I am not responsible. The administration of the lighthouse services is, as I have said, vested by Parliament in the lighthouse authorities I have named.

ENGINEERS (EXAMINATIONS).

Sir R. THOMAS: 4.
asked the President of the Board of Trade how many junior engineers sat for their examinations for Board of Trade certificates during 1927; and how many were successful?

Sir P. CUNLIFF-LISTER: 1,342 candidates sat for examination for Board of Trade certificates as second engineer in 1927, and of this a timber 818 were successful in obtaining certificates at a first or subsequent attempt.

Sir R. THOMAS: Is the right hon. Gentleman aware that these Regulations ate too severe?

Sir P. CLINUFFE-LISTER: No, Sir, I should be very sorry to agree to that proposition. I think the standard in the British mercantile marine is high, and is rightly high, and that, it is being maintained wthout difficulty.

Sir R. THOMAS: Is the right hon. Gentleman not aware that a scarcity of engineers for the mercantile marine is becoming very apparent?

Sir P. CUNLIFFE-LISTER: No, Sir, I should be sorry to accede to that statement either. I really do not think that we should improve either the service or the men who get into the service, if we lowered the present standard—a standard with which this great service undoubtedly does comply without any great difficulty.

Mr. KIRKWOOD: Is there any scarcity of engineers?

Sir P. CUNLIFFE-LISTER: I do not think so, but I should like to have notice of that question. I have not heard of any.

Mr. KELLY: Is the right hon. Gentleman aware of the number of sea-going engineers who are at present unemployed?

Sir P. CUNLIFFE-LISTER: I do not know the precise number, but the hon. Member's question bears out what I say, namely, that we are able to maintain our high standard in this service.

Mr. KIRKWOOD: is there at the moment any dearth of engineers sitting' for their certificates?

Sir P. CUNLIFFE-LISTER: No, I think it is obvious there is not, because there were 1,342 candidates.

Sir R. THOMAS: is the right hon. Gentleman not aware that in most ports in the British Isles there is a great scarcity of lust-class marine engineers?

Sir P. CUNLIFFE-LISTER: But we should not get first-class engineers by lowering the standard of the examination.

Mr. MACLEAN: Does the right hon. Gentleman not see that this question relates, not to first-class engineers, but to junior engineers?

Mr. KIRKWOOD: It is because the shipowners do not pay the engineers.

Oral Answers to Questions — TRADE AND COMMERCE.

CUTLERY (IMPORTS).

Mr. FENBY: 5.
asked the President of the Board of Trade whether any record is kept of the various categories of cutlery imported into this country; and, if so, whether farriers' knives is one of those categories?

Sir P. CUNLIFFE-LISTER: Cutlery is divided into seven categories for the purposes of the import returns. Steel knives are grouped together in one of those categories, and there is no separate enumeration of farriers' knives.

Mr. HANNON: Is it not the fact that the farriers' knife made in Britain is far superior to the imported article?

Sir P. CUNLIFFE-LISTER: I have no doubt of that fact.

STATEMENT shewing for certain Counties in Scotland the Annual Rents (exclusive of rates) charged for houses, built with State Assistance under the Housing Acts, which contain 4, 3 and 2 habitable apartments respectively, and are controlled by the County Council.


County


Number of Apartments in House.
Fife.
Stirling.
Lanark.
Ayr.
Midlothian.


Rents.
Rents.
Rents.
Rents.
Rents.


From
To
From
To
From
To
From
To
From
To



£
£
£
s.
£
£
£
s.
£
£
£
£


4
22
24
21
0
28
21
32
0
15
25
16
33


3
12
20
16
0
27
12
29
0
10
22
16
28


2
10
10
12
10
21
12
19
10
None
None
13
13

TEA (IMPORTS).

Mr. PILCHER: 6.
asked the President of the Board of Trade the quantities of tea imported into this country during the last completed year from India, Ceylon, China, and Java, respectively, and the quantities of tea from each of those respective sources which were held in. this country on the date of the last available return?

Sir P. CUNLIFFE-LISTER: Particulars as to imports of tea during 1927 are given on page 27 of the Accounts of Trade and Navigation fur December last. As to bonded stocks, particulars distinguishing the countries from which the tea was consigned are not compiled, but, a total figure of tea in bond at the end of 1927 is given on page 215 of the same issue of the Monthly Accounts, and a corresponding total for the 31st, March will be found on page 215 of the March accounts.

Oral Answers to Questions — SCOTLAND.

COUNTY COUNCIL HOUSES (RENTS).

Mr. WESTWOOD: 8.
asked the Secretary of State for Scotland the rents charged for houses of four, three, and too apartment respectively, which are controlled by the county councils of Fife, Stirlingshire, Lanarkshire, Ayrshire, and Midlothian?

The SECRETARY of STATE for SCOTLAND (Sir John Gilmour): As the information desired involves a number of figures I propose with the hon. Member's permission to circulate it in tabular form in the OFFICIAL LEPORT.

Following is the statement:

HEBRIDEAN STEAMER SERVICES.

Mr. JOHNSTON: 9.
asked the Secretary of State for Scotland whether he has received resolutions from the parish council of Tiree and from public meetings at Cornaigmore, Scarinish and Baleinartine, Tiree, regarding the inadequacy of the steamer service proposed in the new mail contract for the exposed and dangerous route to Time, Coll and Barra; and whether he proposes to take the necessary steps to ensure a more safe and commodious service than can be supplied either by the "Cygnet" or the "Plover"?

Sir J. GILMOUR: The answer to the first part of the question is in the affirmative. As regards the second part, by the contract which is before the House the contractors have undertaken to provide a new boat for this service within five years provided it is the intention of both parties to continue the contract at the expiry of that period. As soon as a new boat is built to take the place of the "Plover" in accordance with the contract, the latter will replace the "Cygnet," and that will undoubtedly be an improvement. I do not know on what the hon. Member bases the suggestion that either of these boats is unsafe.

Mr. MACQUISTEN: Has the right hon. Gentleman also received resolutions from a large number of meetings in South Uist protesting against the present service, and protesting against the entrance into the new contract; and is he not aware that is is the opinion of all these people that the handing over of the Highlands and Islands to this steamboat company, will result in the destruction of the Highlands?

Mr. MACLEAN: Are these people to understand that they will have to wait five years for an improved service until a new boat is built?

Sir J. GILMOUR: indicated dissent.

Mr. MACQUISTEN: Will the right hon. Gentleman give us an opportunity of debating this matter?

10. Mr. JOHNSTON: asked the Secretary of State for Scotland whether he is aware that, in pre-war times, there was a three-days-a-week steamer direct service from Oban to the Skye ports, which service is now discontinued; that passengers for
the thickly-populated crofting district of Glendale now reach Portree from Kyle or Mallaig at 6 p.m and require to hire motor transport for 32 miles; and whether, before signing the new agreement for a subsidised service, he will make provision for adequate transport arrangements between the mainland and the West of Skye?

Sir J. GILMOUR: I am aware that direct services by mail-boats from Oban to certain ports on the West of Skye are no longer provided. These ports, however, have regular calls from cargo boats. Glendale is linked with the mainland (via Portree or Kyleakin) by road transport, which in modern conditions is rapidly developing. I learn that a daily motor-omnibus service between Glendale and Portree is about to be instituted. I see no reason to differ from the conclusion reached when post-war facilities were investigated that, having regard to the traffic, there is no justification for the provision of another regular steamer service to the Skye ports.

Mr. JOHNSTON: Can the right hon. Gentleman say if there will be an early opportunity of discussing the proposed arrangement with the MacBrayne Steamship Company?

Sir J. GILMOUR: That is a matter which is not in my hands. No doubt there will be an opportunity.

POOR LAW RELIEF.

Mr. WESTWOOD: 11.
asked the Secretary of State for Scotland if he is aware that Poor Law inspectors are taking into account the full amount of friendly society benefits paid to members in assessing the amount of relief to be granted when application for such relief is made; that The Out-door Relief (Friendly Societies) Act, 1904, only allows boards of guardians to take into consideration sums received from friendly societies in so far as such sums exceed 5s. a week; and that this Act does not apply to Scotland; and, if so, what action, if any, does he propose to take to extend the provisions of the foregoing Act to Scotland?

Sir J. GILMOUR: I am aware that the legal position is as stated by the hon. Member. I understand, however, that the practice of parish councils varies, some taking into account only part of any
benefit received from friendly societies. As at present advised, I am not prepared to take any action to extend the statutory provisions to Scotland.

Major COLFOX: Can the right hon. Gentleman say how the guardians of the poor are to arrive at decisions without taking into consideration every sort of income of the applicant?

AFFORESTATION (SHEEP GRAZING).

Mr. MACLEAN: 12.
asked the Secretary of State for Scotland what reply he has made to those sheep farmers who have protested against the taking over of sheep grazings by the Forestry Commissioners; and what action he has taken, if any, to enable those sheep farmers to continue the rearing of sheep?

Sir J. GILMOUR: The protests which I had in mind when I answered the hon. Member's question on 4th April related to the year 1924 and were the subject of correspondence between the Board of Agriculture for Scotland, the Forestry Commission and the National Farmers' Union of Scotland at the time. As regards the question of action on my part, I would refer the hon. Member to my answer to the second part of his question of 4th April.

BLAIR FARM, MUIR OF ORD.

Mr. MACLEAN: 13.
asked the Secretary of State for Scotland if the conditions are being observed un which the Land Court permitted Blair Farm, Muir of Ord, to be taken from its previous occupants; whether its present occupant owns another farm; and whether he lives in the farm house of Blair farm?

Sir J. GILMOUR: I am informed that the Land Court by Order dated 21st July, 1924, held that the proprietor of the holding mentioned having proved that the holding was his only landed estate, and that he was to reside personally upon it, was entitled to resume the holding for the purpose of personal residence. I have no further information on the subject.

Mr. MACLEAN: Will the right hon. Gentleman make inquiries into this matter, because my information is that this individual is not living on the holding?

Sir J. GILMOUR: I will make inquiries, but I do not think that I have any power to intervene in this case.

Mr. MACLEAN: Is the right hon. Gentleman not aware that this particular holding was taken from a farmer, in whose occupancy it was for many years, in order to give this proprietor the right to occupy it, and that the condition laid down was that he should live in the farmhouse, which, I am informed, he is not doing?

Sir J. GILMOUR: As I said, the Court decided this matter, and, the Court having decided it, I have no more jurisdiction.

Mr. MACLEAN: Does the right hon. Gentleman not bear in mind that the condition laid down by the Court was that this individual must occupy the farm? My question is whether he occupies the farm in accordance with that condition?

Mr. KIRKWOOD: If after inquiry the right hon. Gentleman finds that this individual is living in a hotel, and not in the house on the farm, what action is he going to take?

Sir J. GILMOUR: As I have explained, there is no action which I can take.

HERRING FISHING (CLOSE TIME).

Sir ROBERT HAMILTON: 14.
asked the Secretary of State for Scotland if it is intended to take any action to fix a close time for the commencement of the herring-fishing season in Scottish waters?

Sir J. GILMOUR: The matter is under consideration by the Fishery Board for Scotland, but no action can be taken so far as this year's fishing is concerned.

LAND SETTLEMENT (REPORT).

Sir R. HAMILTON: 15.
asked the Secretary of State for Scotland when the Report of the Committee on the Costs of Land Settlement in Scotland will be published?

Sir J. GILMOUR: I am not yet in a position to add to the reply which I gave to the question on this subject addressed to me on the 20th March by the hon. and gallant Baronet the Member for Caithness and Sutherland (Sir A. Sinclair).

Sir R. HAMILTON: Will the Report be published?

Sir J. GILMOUR: As soon as I get it, I will consider that, but no doubt it will be published.

Oral Answers to Questions — GOVERNMENT DEPARTMENTS.

SHERIFF COURTS, SCOTLAND (ALIENS).

Lieut.-Colonel Sir FREDERICK HALL: 16.
asked the Secretary of State for Scotland how many aliens or men of alien parentage there are in offices affected by the Sheriff Courts and Legal Officers (Scotland) Act, 1927: whether these aliens have become naturalised British subjects; and on what grounds it is proposed to place them on the establishment of His Majesty's Civil Service?

Sir J. GILMOUR: The admission of persons to established situations in His Majesty's Civil Establishments is governed by Regulations made by the Civil Service Commissioners, with the approval of the Treasury, under the authority of the Order-in-Council of 22nd July, 1920. These Regulations provide, inter alia, that every candidate shall satisfy the Commissioners that he or she is a natural-born British subject and the son or daughter of a father also a natural-horn British. subject; hut exceptions to this provision may be made in specified cases, among them those of persons serving in unestablished uncertificated employment which in normal course, departmental custom or by the grant of establishment to an unestablished class, confers a claim to nomination to the establishment and who satisfy the rule in respect of nationality for established appointment which was in force when their unestablished service began. The Regulations referred to will be duly applied to persons who have a claim to nomination to establishment under the Schemes of Reorganisation of the Sheriff Clerk and Procurator Fiscal Services, to which effect has been given by the Act referred to in the question. The nominations under these schemes have not yet been dealt with by the Civil Service Commissioners and the information asked for in the first and second part of the question is not at present available; but I would add that aliens are not eligible in any circumstances for appointment to established posts in the Civil Service.

Sir F. HALL: If the right hon. Gentleman is not in a position to give the number of aliens in the Sheriff Courts, may I ask him whether, in any appointments that are made, preference will be given to ex-Service men, owing to the large number that have been dismissed recently and are under notice?

Sir J. GILMOUR: All the Depart merits give preference, as far as possible to ex-Service men, and that policy will be continued.

Sir F. HALL: Does the right hon. Gentleman recognise that the great majority of Members of this House prefer to see British subjects in these appointments, rather than aliens?

Mr. W. THORNE: Will the right hon. Gentleman guarantee that the hon. and gallant Member is a real, genuine British subject?

Sir F. HALL: I happen to be one.

Mr. KIRKWOOD: Are any aliens in the employ of the Scottish Office?

MINISTRIES (REORGANISATION).

Mr. THURTLE: 47.
asked the Chancellor of the Exchequer the estimated economy to the national Exchequer which resulted in the past financial year from the reorganisation of certain Ministries mentioned in his Budget speech of last year in so far as that reorganisation has been carried out?

The FINANCIAL SECRETARY to the TREASURY (Mr. Arthur Michael Samuel): For the reasons given by my right hon. Friend the Prime Minister to the hon. Member for Tottenham North (Mr. R. Morrison) on 31st December last, the proposed reorganisation was not proceeded with. If the hon. Member will refer to Class VI of the Civil Estimates for the current year, he will find, in the Votes for the Departments concerned, details of the economies to the total of about £30,000 which have nevertheless been effected.

Mr. THURTLE: Does not the right hon. Gentleman feel, in view of his reply, that it is time that the results of these labours were brought before the House?

Mr. SAMUEL: No, Sir, I do not agree with the opinion of the hon. Member.

CUSTOMS AND EXCISE OFFICERS (WOMEN).

Viscountess ASTOR: 52.
asked the Financial Secretary to the Treasury whether, seeing that women are employed on Customs work in other European countries, he will consider the appointment of suitable women as Customs and Excise officers here?

Mr. SAMUEL: Owing to the nature of many of the duties on which officers of Customs and Excise are employed, it has been found necessary to reserve these posts to men; but during recent years certain duties, previously performed by officers, have been assigned to a clerical class to which women are eligible for appointment, and, as far as practicable, work in connection with old age pensions has been assigned to a separate grade of women pension officers for which men are not eligible.

Viscountess ASTOR: Is the hon. Gentleman aware that certain grades of work for which women are not considered eligible in England are being perforated by women in other countries, and does he think that women in England are less able to carry out those duties than are women in other countries?

Mr. SAMUEL: I cannot know what goes on in other countries. But I know that women might possibly be maltreated or insulted if they carried out such duties at docks, harbours, breweries, and places where rather rough treatment might be expected. It is for that reason only that these duties are closed to women.

Viscountess ASTOR: Is it not the case that if that argument held good we should never have women police; and did not women very often, during the War, handle rough men better than men themselves?

Oral Answers to Questions — COAL INDUSTRY.

CLOSED MINES.

Mr. JOHNSTON: 17.
asked the Secretary for Mines whether he is now in a position to give a list of the coal mines in Scotland which have been or are being closed under the pooling arrangements made by the Scottish coalowners; whether he can give the number of mine workers unemployed as a result of these arrange-
ments; and what steps, if any, are being taken to provide suitable alternative employment?

The SECRETARY for MINES (Commodore Douglas King): I am informed by the Scottish coalowners that 46 pits are to be temporarily closed in the immediate future, and I am asking for a list of these pits. The number of men normally employed at these pits is 8,557, of whom about 503 will continue in employment to keep the pits in good order. The coalowners state that the object of their scheme is to prevent as many men as possible being thrown out of regular employment and to give more regular work to those who can be continued in employment. They are satisfied that, but for the scheme, the number of pits closed and men thrown permanently out of work would have been greater. Should there be an expansion of trade in the future, men will be drawn from the areas in which the collieries are closed to those where work is being carried on.

Mr. JOHNSTON: Will the hon. Gentleman answer the last part of the question, which has been put to him on three successive occasions, namely, what steps are being taken to find alternative employment for the colliers who are displaced as a result of the coal-owners pooling scheme?

Commodore KING: That is a question for the Minister of Labour.

Mr. SHINWELL: Is the hon. Gentleman aware that an answer given yesterday by his hon. Friend the Parliamentary Secretary to the Ministry of Labour, was to the effect that he could not state when the Report would be furnished by the Industrial Transference Board?

Mr. JOHNSTON: Is it not an integral part of the mine-owners' scheme that they will compensate the owners whose pits are closed, but that there is no provision to compensate the colliers?

Commodore KING: The miners who are displaced have the ordinary facilities provided by the Government for unemployment pay.

Mr. SHINWELL: Is the Minister aware that many of the men who are unemployed are being deprived of unemployment pay by the Employment. Exchanges, and will he look into that matter?

Commodore KING: This is a matter for the Minister of Labour.

Mr. KIRKWOOD: Is it not the duty of the Secretary for Mines to look after the interests of the miners? Surely if miners are displaced, it is his business—

HON. MEMBERS: Order order!

Mr. PALING: 23.
asked the Secretary for Mines the number of collieries closed down in Great Britain since January, 1927; the number of men thrown out of work thereby; the number of pits permanently closed as a result of being worked out; and the number temporarily closed owing to trade depression?

Commodore KING: Since 1st, January, 1927, 769 pits in Great Britain, normally employing 80,800 wage-earners, have closed down and not reopened. Of these, 273 pits employing 14,800 wage-earners have been definitely abandoned. Of the remaining 496 which have been notified as closed but not abandoned, 343 pits employing 60,800 wage-earners were closed owing to trade depression, and 153 employing 5,200 wage-earners were closed for a variety of reasons, such as accidents, repairs and reconstruction.

Mr. GEOFFREY PETO: Was it not admitted in the evidence of the Labour party at the Samuel Commission that there would be at least 300,000 miners permanently out of work?

Mr. SHINWELL: In view of the serious state of revealed in the Minister's answer, are the Government contemplating taking any steps to put the matter right?

Mr. SPEAKER: We cannot discuss that at Question Time.

EMPLOYÉS, STIRLINGSHIRE AND MID AND EAST LOTHIAN.

Mr. WESTWOOD: 18.
asked the Secretary for Mines the number of employés engaged in and about the mines in the Counties of Stirlingshire and Mid and East Lothian, respectively, in December, 1924 and 1925, and February, 1928, or the nearest date to that for which figures are available?

Commodore KING: As the reply contains a number of figures I will, with the hon. Member's permission, circulate it in the OFFICIAL DEPORT.

Following are the figures:


NUMBER of WAGE-EARNERS employed at COAL MINES in the COUNTIES of STIRLING, EDINBURGH and HADDINGTON.


Date.
Stirling.
Edinburgh.
Haddington.


December, 1924
10,867
11,862
3,962


December, 1925
8,856
10,982
4,248


February, 1928
6,857
10,177
2,612

COLLIERY EXPLOSION, LEEDS.

Mr. LUNN: 19.
asked the Secretary for Mines if he is aware that three men lost their lives as the result of an explosion at the Temple Pit, Waterloo Main Colliery, Leeds, on Friday last; and whether he proposes to set up a Government inquiry into the causes of the explosion?

Commodore KING: An exhaustive investigation into all the circumstances of this explosion is being conducted by His Majesty's inspectors of mines and also, I have no doubt, full evidence from competent witnesses will be heard at tile adjourned inquest. When this has been completed it will be my duty to consider what, if any, further action is necessary. I have reason to think that the full facts will then have been made public. If I think they have not, I will certainly consider the question of holding a further public inquiry.

SCIENTIFIC TREATMENT OF COAL (EXPERIMENT).

Mr. SHINWELL: 20.
asked the Secretary for Mines the terms of the contract arranged with the Gas Light and Coke Company in respect of scientific treatment of coal?

Commodore KING: The necessary plant for a three years' trial on a commercial scale is being erected at Richmond, on a site provided by the Gas Light and Coke Company, by a company formed for the purpose, known as the Fuel Production Company. The latter company have received a guarantee under the Trade Facilities Act in respect of a loan of £100,000. The Gas Light and Coke Company will act as managers for the Fuel Company and bear all the running expenses, and have an option to purchase the plant at the end of three years. Steps have been taken to safe-
guard the public interest in any patents that may be taken out as a result of this experiment, and full details of the plant and of the results obtained will be made available. The hon. Member will find the matter more fully explained in a statement made by the Parliamentary Secretary to the Board of Education on 11th May, 1927 (OFFICIAL REPORT, Cols. 507–14, Vol. 206).

Mr. SHINWELL: Can the Minister say why it is that when public money is involved, and it is proposed to render assistance to this private company, they should have the option of purchasing the plant outright at the end of three years? Is it not desirable to retain the plant in the hands of the Government?

Commodore KING: No, Sir, it is not Government money; it is money guaranteed under the Trade Facilities Act.

Mr. SHINWELL: But can the Minister say whether it is not true that Government servants, technicians and others, are to render service to the Gas Light and Coke Company in connection with the installation of this plant and its maintenance?

Commodore KING: I should like to have notice of that question, but, of course, the Fuel Research Board are taking a keen interest in this experiment.

Mr. SHINWELL: Can we have from the Minister a statement as to when there will be an opportunity afforded to this House to discuss this very important matter?

Mr. AUSTIN HOPKINSON: Can the hon. Member inform us what earthly use the plant will be to the Government or in Government hands after the experiment?

MINERS' WELFARE FUND.

Mr. TINKER: 21.
asked the Secretary for Mines the amount of money paid from the Royalties Welfare Levy to the Miners' Welfare Fund; and if he is in a position to say how much of this has been allocated towards the provision of pithead baths up to the year 1927?

Commodore KING: The total amount paid into the Miners' Welfare Fund in respect of Royalties Welfare Levy at the 31st March, 1928, was £332,000. The whole of this sum has been appropriated
for the provision of pithead baths, together with £169,300 from other resources of the Miners' Welfare Committee.

EIGHT HOURS ACT (PROSECUTIONS).

Mr. TINKER: 22.
asked the Secretary for Mines if his Department has instituted proceedings for prosecution for breaches of the Eight Hours Coal Mines Act since December, 1926; and, if so, will he state the number of eases taken to Court and convictions secured?

Commodore KING: One such prosecution has been made in respect of offences committed at two collieries owned by the same company and convictions were obtained in both cases.

Mr. PALING: Can the hon. Gentleman say how many other cases there are?

Commodore KING: No, Sir; those are the only cases that have been notified to my Department.

Oral Answers to Questions — TRANSPORT.

AUTOMATIC TRAFFIC REGULATORS, LONDON.

Mr. DAY: 24.
asked the Minister of Transport whether any decision has been arrived at by his Department with regard to the question of making experiments in the Metropolitan area with automatic traffic regulators; and, if so, where these regulators will be erected?

The MINISTER of TRANSPORT (Colonel Ashley): There are various systems of automatic traffic regulation, and I am not clear whether the hon. Member has any particular system in mind. The question of carrying out experiments in this direction in the Metropolitan area is at present under consideration by my Department.

Mr. DAY: Can the right hon. Gentleman say whether satisfactory reports have been received of the electrical traffic regulators used in London?

Colonel ASHLEY: So far I have had no reports.

BOOTHFERRY BRIDGE (BY-PASS ROAD).

Lieut.-Commander KENWORTHY: 25.
asked the Minister of Transport if he is aware that, when the new Boothferry bridge is completed in a few months' time.
the traffic which will cross this bridge will then enter a very narrow roadway with consequent congestion; that a bypass road from the bridge to link up with the new road leading into Hull is urgently needed, and that the city of Hull has contributed £10,000 to the scheme; whether it is proposed to construct this necessary by-pass road; and, if so, when the work will be commenced, in view of its importance to the commerce of the port of Hull?

Colonel ASHLEY: I would refer the hon. and gallant Member to the answer given on the 12th March last to a question by my hon. and gallant Friend the Member for the Howdenshire Division (Major Carver) of which I am sending him a copy.

Lieut.-Commander KENWORTHY: Is the Minister aware that that answer did not deal with the point of my question; and is he aware that when this magnificent bridge is built it will dobonch into a lovers' lane, 11 feet wide, and that no steps are being taken to widen that road as yet?

Colonel ASHLEY: I will certainly look into the question sympathetically to see if the lovers' lane in Hull can be widened.

Lieut.-Commander KENWORTHY: But this is not in Hull; it. leads out of Hull.

Major CARVER: Is the Minister aware that the Ministry of Transport have down there their own engineer and staff who have prepared plans at the Ministry's request, and that the local authorities will do nothing until the Ministry carry out their obligations and promises?

Colonel ASHLEY: Oh, no; I cannot admit that there are any obligations or promises which have not been carried out; but I am going into the whole matter to see whether arrangements can be made with the local authorities.

Major CARVER: Will the Minister refer to the correspondence which took place in August and October, 1924, between the East Riding County Council and the Ministry?

Colonel ASHLEY: I have referred to that correspondence. In August, 1924, I was not responsible.

Lieut.-Commander KENWORTHY: Is it not the fact that this scheme was all ready when the Road Fund was depleted, and has been held up since?

SAVERNAKE FOREST (GATES).

Captain AUSTIN HUDSON: 20.
asked the Minister of Transport whether in view of the danger to traffic ore the Bath Road caused by the two narrow gates at the entrances to Savernake Forest, he will consider authorising a grant from the Road Fund towards the reconstruction of these gates so as to allow of a double line of traffic through them?

Colonel ASHLEY: I am aware of the inconvenience caused by these gates and am prepared to assist any feasible proposal which the responsible highway authority may submit for effecting an-improvement.

Mr. B. SMITH: Is it not the fact that in the heart of London there are many such cases to which, unfortunately, the Ministry has not yet made any contribution?

Mr. CRAWFURD: Arising out of the original answer, will the Minister consider, in reference to this and many other similar cases, the adoption of the simple Gates on Highways Bill which I introduced into the House last Session?

Colenel ASHLEY: This has nothing to do with gates on highways. This concerns a road through a private park.

OMNIBUS FARES, NOUTH LONDON.

Mr. R. MORRISON: 27.
asked the Minister of Transport whether he has now received communications from the local authorities of North London protesting against the recent increases in omnibus fares: and what action he proposes to take?

Colonel ASHLEY: I have in the course of the past few days received a copy of a resolution passed by the Southgate Urban District Council with regard to a recent increase in omnibus fares, and I am inviting the observations of the omnibus proprietors concerned.

Mr. HARRIS: Under the London Traffic Act is there not power to veto any increase in fares—to approve or disapprove?

Colonel ASHLEY: If a Deal authority mikes a submission to me under the Act 1924 that any fare is unreasonably high, I can then go into the matter.

Mr. MORRISON: Can the right hon. Gentleman say whether he will make public the observations he receives from the London General Omnibus Company.

Colonel ASHLEY: I should have to see, first, what the observations were. The hon. Member will appreciate that I am acting in a judicial capacity in this respect, and therefore I ant not at liberty to publish things which I otherwise might publish.

Mr. B. SMITH: Is the right hon. Gentleman aware that for something two years reasonable fares have been afforded to the people in North London, and that the action of the company in increasing the fares has thereby reduced the advantages enjoyed by the inhabitants?

Colonel ASHLEY: Is the hon. Member aware that what is a reasonable fare is a matter of opinion?

Mr. MACQUISTEN: Is not this the natural result of the granting of a monopoly under the London Traffic Act?

Captain GARRO-JONES: Is it not the fact that the Minister has received several complaints about these increased fares, and has frequently invited the observations of the company, but has never taken any further action?

Colonel ASHLEY: Speaking without refreshing my memory, I think this is the first official intimation I have received.

Mr. MACQUISTEN: Is not London getting a taste of what we have experienced in the Highlands?

MOTOR-CAR LICENCE FORMS.

Colonel HOWARD-BURY: 28.
asked the Minister of Transport whether he can state the reasons for issuing square motor-car licences for round holders, necessitating the cutting of the licence to fit the holder; whether he is aware that there is a circle at the back of the licence which does not coincide with the circle on the front, and that if the licence is cut by following the back circle an
essential part of the licence is cut away; and whether in future licences will be issued in a more convenient form?

Colonel ASHLEY: The form of motor-car licence is adapted for fitting either into a rectangular holder, or, when cut down, into a circular holder, as the licensee may find convenient. For accounting reasons it is necessary to issue licences to licensing authorities in book form with counterfoils, and for this a rectangular shape is essential. In the case of all licences which I have examined, the exterior circle on the front coincides with the circle on the back, and no essential part of the licence, so far as I am aware, is cut away if the latter line is followed. But the latter circle can be omitted, and I will consider the desirability of doing so in future prints.

Colonel HOWARD-BURY: Is it not the essence of bureaucracy to try to fit square pegs into round holes?

Oral Answers to Questions — POST OFFICE.

TELEPHONE SUBSCRIBERS' DEPOSITS.

Mr. DAY: 29.
asked the Postmaster-General the amount of deposits held by the Post Office which have been made by persons who were originally telephone subscribers and whose telephones have now been disconnected, and the amount of deposit that has not been reclaimed?

The POSTMASTER-GENERAL (Sir William Mitchell-Thomson): No figures are available as to the total amount of deposits made by persons who were subscribers and have relinquished the service. At the end of December last the accumulated amount of deposits which have not been repaid owing to the impossibility of tracing the holders was £17,422.

Mr. DAY: Have any steps been taken by the Post Office to get this money hack to the rightful owners?

Sir W. MITCHELL-THOMSON: I have certainly tried to trace the owners where possible, but the total amount is only £75,000.

POSTMEN (PHYSICAL REQUIREMENTS).

Sir F. HALL: 30.
asked the Postmaster-General whether there is a minimum height limit required in regard to persons
seeking employment as postmen; if so, will he state what is this minimum; and whether it is insisted upon in the case of applicants who have served in the fighting Forces of the Crown?

Sir W. MITCHELL-THOMSON: For appointment as postman there is a minimum height limit of 5 feet 4 inches. This limit applies to all applicants.

Sir F. HALL: Is the right hon. Gentleman aware that many of these men who were just under 5 feet 4 inches were able to serve in the War and carry out their duties, and can he not give a little more elasticity to the Regulations applying to ex-service men?

Sir W. MITCHELL-THOMSON: I have already explained that this question is due to practical difficulties in connection with the height of the fittings in the office. In view of the fact that 50 per cent. of the vacancies are reserved for ex-service men and the other for boy messengers, there is an ample supply of ex-service men of suitable height.

Sir HARRY BRITTAIN: Why should there be any height limit at all so long as the men are strong enough?

Sir W. MITCHELL-THOMSON: They have to reach to the top of the fitting.

CASH-ON-DELIVERY SERVICE (AGRICULTURAL PARCELS).

Mr. HURD: 31.
asked the Postmaster-General, in view of the extension of the cash-en-delivery system promised for 30th April, whether he will consider the advantages of inaugurating an agricultural parcels post which would allow farmers and housewives to make use of the new facilities; and, if financial considerations do not at present permit of this experiment, whether he will consult the Empire Marketing Board with a view to securing support for the trial of a service which has proved of value abroad as a direct channel between producer and consumer?

Sir W. MITCHELL-THOMSON: Proposals for reduced rates for agricultural produce sent by parcel post have been very carefully considered, but it was definitely decided that the difficulties of such a service in this country were too
great to render its institution advisable. Accordingly, the alternative of an arrangement with the railway companies was pursued, and I believe that farmers will derive considerable advantage from the extension of the cash-on-delivery system in connection with the railway companies' parcel service, which permits of larger consignments and therefore seems generally better adapted to their requirements than the parcel post.

BILL STAMPS.

Sir BASIL PETO: 32.
asked the Postmaster-General whether there is any rule or Regulation in his Department that bill stamps are not to be issued from a post office after four p.m.?

Sir W. MITCHELL-THOMSON: Although the normal hours of sale of Inland Revenue and fee stamps at post offices are 10 a.m. to 4 p.m., which are those during which such stamps are sold at Inland Revenue offices, arrangements are made wherever possible for applications made after 4 p.m. to be dealt with.

Sir B. PETO: Is the right hon. Gentleman aware mat many important post offices are absolutely precluded from issuing these stamps after 4 p.m.; and is he not aware that it is precisely after 4 p.m. until the time of the posting of the mail that these stamps are required most, because business men cannot ascertain earlier than 4 o'clock the exact denominations they require?

Sir W. MITCHELL-THOMSON: I will reconsider this matter in view of the representations made by the hon. Member. These stamps are fixed in concurrence with the Inland Revenue Department, and the demand for them is comparatively small.

Sir B. PETO: Are not the stamps always there in the post office, and why should they not be handed out to anyone who wants them?

Sir W. MITCHELL-THOMSON: I will explain the matter to the hon. Member if he will confer with me.

Oral Answers to Questions — NAVAL AND MILITARY PENSIONS AND GRANTS.

Sir B. PETO: 33.
asked the Minister of Pensions whether his attention has been called to the case of Mrs. Elizabeth
Physick, of Elm Cottage, Georgeham, Devon, who lost two sons in the War, who served, respectively, with the 2nd Devons and in the Royal Navy; whether he is aware that she is in receipt of a dependant's need pension of only 9s. 2d. a week and that she has no other means except the old age pension, is 72 years of age and almost blind, and has recently lost her husband; and whether he can say on what grounds the Ministry of Pensions refuse an increase in her dependant's need pension?

The PARLIAMENTARY SECRETARY to the MINISTRY of PENSIONS (Lieut.-Colonel Stanley): The war pension of 9s. 2d. a week which Mrs. Physick is receiving is materially in excess of her dependence upon her two sons. A claim to an increased pension on grounds of incapacity and need has been considered but, after taking into account her old age pension of 10s. a week and the share in the responsibility for her support which must be credited to her surviving son, no increase is, under present circumstances, found to be admissible.

Sir B. PETO: In considering the question of the dependant's needs, does the Department consider that the amount of assistance given by a son before the War who was killed in the War, is any measure of the amount of assistance an aged and widowed mother might be expected to receive in her altered condition and the position which the son would have attained if he had not been killed in the War?

Lieut.-Colonel STANLEY: As I have already explained, that is taken into account and that is why she is receiving nearly twice as much as her sons contributed.

Oral Answers to Questions — ROYAL NAVY.

SCOTCH SHALK OIL.

Mr. SHINWELL: 35.
asked the First Lord of the Admiralty what proportion of the oil fuel consumed in vessels of the Fleet is derived from shale produced in Scotland?

The PARLIAMENTARY SECRETARY to the ADMIRALTY (Lieut.-Colonel Headlam): Scotch shale oil was consumed in vessels of the Fleet to the extent of approximately 2 per cent. of the Fleet expenditure during the financial year 1927–1928.

Mr. SHINWELL: Is the hon. and gallant Gentleman aware that it is the considered policy of the Government to advise the purchase of British goods, and, having regard to that fact, is it not desirable that the Admiralty should purchase larger quantities of Scottish shale oil?

Lieut.-Colonel HEADLAM: It would be very pleasant indeed if the Admiralty could afford to do so, but unfortunately it is too expensive.

DEVONPORT DOCKYARD (DISCHARGES).

Mr. HORE-BELISHA: 36.
asked the First Lord of the Admiralty how many discharges have taken place in Devonport Dockyard on the responsibility of the dockyard authorities since the issue of the order in December last giving them powers to discharge workmen without consulting the Admiralty; and the total number of discharges from Devonport Dockyard since the issue of this order?

Lieut.-Colonel HEADLAM: The numbers are 122 and 252 respectively; 151 more have been discharged on account of age, invalidity, death or at their own request.

Oral Answers to Questions — AFFORESTATION.

Mr. WELLOCK: 37.
asked the hon. Member for Monmouth, as representing the Forestry Commissioners when the survey of the whole of the afforestable land in the United Kingdom will be completed and when the Report may be expected?

Colonel Sir GEORGE COURTHOPE: I have been asked to reply. With the limited staff and funds at their disposal the Forestry Commissioners have not felt justified in surveying land far in advance of their immediate requirements, and it is not therefore possible to say when the survey of the whole of Great Britain will be completed and the total area of afforestable land will be definitely known. A survey of the woodlands of Great Britain has recently been completed and the Report thereon is now being printed arid will be published.

Mr. PALING: Could the hon. and gallant Gentleman say whether any approach has been made to the Forestry Commission by the Industrial Transference Board asking them to increase
their programme in order to provide more work for the unemployed?

Mr. SPEAKER: That, question should be put on the Paper.

Oral Answers to Questions — INDIA (PROHIBITED BOOKS).

Mr. WELLOCK: 38.
asked the Under-Secretary of State for India whether, in view of the fact that the India Office cannot furnish a list of the books proscribed by the Government of India and that a bookseller in this country has no definite assurance as to which books in India are liable to confiscation on arrival in India, he will consider the desirability of publishing at least a statement indicating the kind of books which are liable to confiscation?

The UNDER-SECRETARY of STATE for INDIA (Earl Winterton): The number of books published in this country which are prohibited from entering India is very small, and my Noble Friend does not consider that there is any necessity to publish a statement of the kind suggested. The hon. Member may, however, take it that the classes of books which are prohibited are those which are grossly offensive from the religious point of view and those of a revolutionary or seditious nature, the publication of which in India would constitute an offence under Section 124A. of the Indian Penal Code.

Mr. WELLOCK: Is the Noble Lord not aware that the Foreign Office refused to give a categorical statement in regard to the books which are proscribed, and the Post Office threatened to take proceedings other than confiscation against anyone sending the wrong books; and is he aware that one of the books proscribed is "Socialism and the Living Wage"?

Earl WINTERTON: This question has nothing to do with the Foreign Office. I think the hon. Member must have meant the High Commissioner's Office. If any bookseller or private individual is doubtful about any book which he wishes to send to India, he will be able to inquire at that office whether or not that book is prohibited. It is not proposed to publish a list, which would only be a gratuitous advertisement for a number of very undesirable publications.

Mr. THURTLE: If these books are likely to come under the ban of the law in India as being seditious, why are they not allowed to go there so that the law may take its course in India?

Earl WINTERTON: The reason is that under the law it is open to the Government of India to notify from time to time such books as are prohibited under the Act. I regret if any inconvenience has been caused to any respectable bookseller.

Oral Answers to Questions — CHINA (BRITISH STEAMSHIP OFFICERS).

Lieut.-Commander KENWORTHY: 39.
asked the Secretary of State for Foreign Affairs whether his attention has been called to the position of the British officers of the China Merchants' Steam Navigation Company in China; is he aware that about 170 of them have received no wages since the end of November and others have been waiting for a much longer time; that the control of the company has been taken over by the Nanking Government and the Nationalist authorities appear to be taking no action to ensure that the wages are paid; and that many of these men, with families, are on the borderland of starvation: and what action His Majesty's Government proposes to take for their immediate relief?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Godfrey Locker-Lampson): According to my information, the first three parts of the hon. and gallant Member's question are generally in accordance with the facts, except that the number of British subjects involved is considerably less than 170. Representations have been made to the Nationalist authorities on the subject of the default, and every effort will he made with a view to securing payment of the wages due to the British employés in this, as in other, nationalised concerns.

Lieut.-Commander KENWORTHY: What is the result of the representations made?

Mr. LOCKER-LAMPSON: There has been no result as yet, but a telegram has just been sent with instructions to make further representations.

Lieut.-Commander KENWORTHY: Will the hon. Gentleman take as vigorous action in this case as he would if the aggrieved persons were wealthy property owners?

Mr. LOCKER-LAMPSON: We always do our best, where it can be done, to protect British lives, property and interests.

Mr. DAY: In view of the hon. Gentleman's statement that the number is considerably less than is stated in the question, can he tell the House what the exact number is?

Mr. LOCKER-LAMPSON: I cannot, without notice, but the figure of 170 given in the question includes a good many Norwegians and White Russians.

Oral Answers to Questions — TUBERCULOSIS (INDUSTRIAL POPULATION).

Mr. HORE-BELISHA: 42.
asked the Minister of Health if he can give the percentage of the industrial employed population who were discharged from their work in 1927 by reason of the fact that they were suffering from tuberculosis?

The following TABLE shows in respect of July, 1924 to 1927, the number of insured men and women respectively in Great Britain classified as belonging to the Engineering Industry, and for the dates specified in the question the number of such persons recorded as unemployed. Statistics of the numbers insured at the latter dates are not available.


Engineering Industry—Great Britain.


Date.
Estimated Number of Insured Workpeople.
Date.
Number of Insured Workpeople Unemployed.



Men.
Women.

Men.
Women.


July, 1924
…
849,190
63,660
22nd December, 1924
…
110,810
4,020


July, 1925
…
843,440
70,730
21st December, 1925
…
101,906
3,102


July, 1926
…
838,630
71,170
20th December, 1926
…
132,602
4,319


July, 1927
…
837,410
72,470
19th December, 1927
…
78,463
2,787


809,410*
72,260*
20th February, 1928*
…
78,129
2,966


26th March, 1928*
…
75,019
2,952


* Exclusive of persons aged 65 and upwards.

Oral Answers to Questions — AGED PERSONS.

Mr. KELLY: 44.
asked the Minister of Labour the number of men and women who have been struck off benefit at the Employment Exchanges since 1st January, 1928, by reason of having reached the age of 65?

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Sir Kingsley Wood): No, Sir. It would be impracticable to obtain accurate or complete statistics on this subject.

Oral Answers to Questions — UNEMPLOYMENT.

ENGINEERING TRADE.

Mr. KELLY: 43.
asked the Minister of Labour the number of men and women registered as employed in the engineering trade on 22nd December, 1924, 21st December, 1925, 20th December, 1926, and 19th December, 1927, and in February and March, 1928?

The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. Betterton): As the reply includes a number of figures, I will, with the hon. Member's permission, circulate a statement in the OFFICIAL REPORT.

Mr. KELLY: Could the hon. Gentleman say whether the unemployment figures for 1927 show an increase as compared with 1926?

Mr. BETTERTON: No, Sir, they show a considerable decrease in comparison with 1926.

Following is the statement:

Mr. BETTERTON: Between 1st January, 1928, and 2nd April, about 31,600 men and 1,100 women in Great Britain ceased to have current claims for unemployment benefit by reason of their having attained the age of 65. There are no statistics showing how many of them remained unemployed.

Mr. KELLY: Does the hon. Gentleman's Department take any steps to help these people of the age of 65 to get employment?

Mr. BETTERTON: Yes, Sir, we do all that we can.

Mr. W. THORNE: Is there any record of the number of those people who are mentioned in the answer that are receiving the old age pension?

Mr. BETTERTON: I am not sure whether there is, but in any case I should have to ask for notice of that question.

INSURANCE REGULATIONS.

Mr. LUNN: 55.
asked the Minister of Labour whether any regulations have been issued by his Department to the managers of local Employment Exchanges regarding the administration of the new Unemployment Insurance Act; and whether such regulations, if issued, are obtainable by Members of this House?

Mr. BETTERTON: In general, the rights of persons insured under the Unemployment Insurance Acts are governed by Statute, but certain points of detail are covered by Regulations laid before Parliament and published, of which I am sending the hon. Member a list.

INDUSTRIAL TRANSFERENCE BOARD.

Mr. ERNEST BROWN: 56.
asked the Minister of Labour whether he is now in a position to state if a Report of the Industrial Transference Board will be made available to Members of this House; and, if so, whether he can give an approximate date?

Mr. BETTERTON: I would refer the hon. Member to the statement which I made yesterday in reply to the hon. Member for Devonport (Mr. Hore-Belisha).

Mr. SHINWELL: Is the hon. Gentleman now in a position to say if it is possible to expedite the proceedings of this Board, having regard to the important functions that it is called upon to perform?

Mr. BETTERTON: I think the Board are fully competent, and it is not for me to tell them how they should proceed.

Mr. PALING: In view of the fact that whenever this question is asked, the hon. Gentleman always refers to a previous
answer, and that in no case have we got much information yet, can he tell us whether anything is being done or not?

Mr. BETTERTON: I referred to the previous answer because the previous answer answered this question.

ARMY RESERVISTS (BENEFIT).

Mr. WELLOCK: 58.
asked the Minister of Labour how many of the 1,344 A Reservists returned from China who recently were still unemployed are receiving unemployment benefit, and the number whose benefit has been discontinued?

Mr. BETTERTON: I am having inquiry made and will communicate with the hon. Member.

Oral Answers to Questions — CABINET MINISTERS' SALARIES.

Captain CROOKSHANK: 45.
asked the Prime Minister whether he is taking any steps with a view to reconsidering the whole scale of Cabinet salaries?

The PRIME MINISTER (Mr. Baldwin): No, Sir.

Captain CROOKSHANK: Is it not the case that some of the right hon. Gentleman's colleagues receive very low pay, and will he not give that matter some reconsideration with a view to checking the journalistic tendencies of some of his colleagues?

Oral Answers to Questions — NATIONAL FINANCE.

NEW SILVER COINAGE.

Sir B. PETO: 46.
asked the Chancellor of the Exchequer what is the value in gold of eight of the half-crowns of the new coinage; what is the annual saving due to the debased silver currency; and the annual cost of a silver coinage of the same fineness of silver as that which was in circulation before the War?

Mr. SAMUEL: The silver content of eight half-crowns of the old pre-1920 standard of fineness is worth about 8s. at the present price of silver bullion. The silver content of eight half-crowns of the present standard of fineness is worth about 4s. 4d. On a total circulation of £60,000,000, the difference in fineness would represent a difference in value of about £11,000,000. It is not possible to
turn these figures into a statement of annual profit and loss, since the demand for silver coins, the rate of recoinage, and the price of silver, are continually varying. Broadly speaking, the position has been for many years past that the profits on recoinage have not altogether sufficed to meet the expense of redeeming surplus silver coin.

INCOME TAX AND SUPER-TAX.

Mr. THURTLE: 48 and 49.
asked the Chancellor of the Exchequer (1), the estimated amount of Super-tax due to be paid but not paid at the 1st April, 1928;
(2) the estimated loss to the Revenue which would arise from a reduction of 1s. in the standard rate of Income Tax?

Mr. SAMUEL: I must ask the hon. Member to await the Budget Statement.

CUSTOMS DUTIES (WINCHES).

Mr. CRAWFURD: 54.
asked the Financial Secretary to the. Treasury if he is aware that duty has been charged, under Section 3 of the Finance Act, 1925, which refers to accessories and component parts of motor cars, motor bicycles, or motor tricycles, other than tyres, on winches which have no motive power of their own; and if he will state the grounds upon which winches have been included among the articles covered by Section 3 of this Act?

Mr. SAMUEL: If the hon. Member will furnish me with details of any particular case he has in mind, I will make it my business to have inquiries made and let him know the result.

Oral Answers to Questions — INDUSTRIAL ASSURANCE (LAPSED POLICIES).

Mr. KELLY: 50.
asked the Financial Secretary to the Treasury whether any representations have been made to his department regarding industrial assurance companies, and the number of policies which terminate each year due to the holders being unable to continue payment of premium; and whether it is the intention of the Treasury to deal with the position?

Mr. SAMUEL: I am not aware that any general representations on this subject have been made to the Treasury or
to the Industrial Assurance Commissioners. As regards the second part of the Question, I would refer the hon. Member to the Answer given on the 14th March to a Question by the hon. Member for the Plaistow Division (Mr. W. Thorne).

Mr. KELLY: In view of the hardship that has been created by the action of these companies, will the Government make some investigation?

Mr. SAMUEL: No, Sir. Investigations were made, as the hon. Member will recollect, and the Act of 1923 provides that certain things shall happen after the 7th June. Perhaps the hon. Member will wait until after the 7th June, and then put down another question if necessary.

Mr. W. THORNE: Has the hon. Gentleman read in the newspapers the very serious allegations that have been made against these industrial assurance companies, and will he not make an investigation into the matter?

Mr. SAMUEL: An investigation was made, and I would ask the hon. Member also to wait till after the 7th June and see what happens.

Mr. MACLEAN: Is the hon. Gentleman aware that these accusations have been made about companies which are working now, and, if these accusations be true, the companies will get away with a lot of money to which they are not entitled, while, on the other hand, if they are not true, the insurance companies are being maligned in a manner in which they ought not to be; and will he institute an investigation now as to what has transpired since the Act was passed?

Mr. SAMUEL: I will study what the hon. Gentleman has said after the House has risen, and see what can be done.

Oral Answers to Questions — FILMS (PRODUCTION AND ASSISTANCE).

Mr. HORE-BELISHA: 53.
asked the Financial Secretary to the Treasury whether the commission charged or the percentage paid to the Government in
respect of contracts for films produced with the assistance of Government Departments is the same in every case; and what is the total amount received to date?

Mr. SAMUEL: The terms of contracts made by Government Departments giving assistance to film-producing companies are settled with regard to the particular requirements of each case. It is not possible to fix a standard rate of commission. The total payments received to date amount to approximately £19,800.

Oral Answers to Questions — WAGES.

Lieut.-Commander KENWORTHY: 57.
asked the Minister of Labour in which industries wages remained constant during 1927 and how many workpeople were employed in these industries; and whether he can state the real decrease in wages of the 1,855,000 workpeople whose weekly wages suffered a net decrease of £388,500 in 1927, allowing for the fall in prices and decrease in the cost of living?

Mr. BETTERTON: Among the principal branches of industry in which no change in wage rates was reported in 1927 were the following: cotton, wool, shipbuilding, chemicals, pottery, printing, flour milling, leather manufacture, gas supply, tramways, the dock and shipping services, coal mining in Northumberland and Durham, and the building industry (with a few exceptions). It is not possible, however, to give any reliable figure for the number of workpeople in these and other industries whose wages remained unchanged. The decrease in the real wages of those workpeople who sustained a net reduction in 1927 cannot be stated exactly, but is estimated to average approximately 4 per cent. In the case of the great majority of wage-earners, real wages increased during the year.

Lieut.-Commander KENWORTHY: Does not the hon. Gentleman's answer belie what the Prime Minister told the electors of Hanley on this subject?

Mr. W. THORNE: Will the hon. Gentleman consult with the President of
the Board of Trade, and see whether it is possible to print in a White Paper the answer to a question which I put to the President of the Board of Trade?

BUSINESS OF THE HOUSE.

Ordered,
That the Proceedings of the Committee of Ways and Means be exempted, at this clay's Sitting, from the provisions of the Standing Order (Sittings of the House).—[The Prime Minister.]

FINANCIAL STATEMENT (1928–29).

Copy ordered, "of Statement of Revenue and Expenditure as laid before the House by Mr. Chancellor of the Exchequer when opening the Budget."—[Mr. A. M. Samuel.]

Copy presented accordingly; to lie upon the Table, and to be printed. [No. 62.]

CIVIL STAFF REDUCTION PROGRAMME (1927–32).

Copy ordered, "of Statement of Reductions effected in the Staffs of Civil Departments in the period 1st April, 1925, to 1st January, 1928, and of Schemes for Reduction of Staffs of Civil Departments during the period of five years from 1st April, 1927."—[Mr. A. M. Samuel.]

Copy presented accordingly; to lie upon the Table, and to be printed. [No. 63.]

COMPARISON OF EXPENDITURE, 1923 TO 1928.

Copy ordered, "of Statement of Expenditure on Consolidated Fund Services and Net Expenditure on Supply Services (excluding Post Office) for the years 1923 to 1928, inclusive, adjusted in respect of accounting changes introduced in 1928."—[Mr. A. M. Samuel.]

Copy presented accordingly; to lie upon the Table, and to be printed. [No. 64.]

REPRESENTATION OF THE PEOPLE (EQUAL FRANCHISE) BILL.

As amended, to be printed. [Bill 104.]

Orders of the Day — WAYS AND MEANS.

Considered in Committee.

[Mr. JAMES HOPE in the Chair.]

Orders of the Day — FINANCIAL STATEMENT.

The CHANCELLOR of the EXCHEQUER (Mr. Churchill): It would be easy to give an epitome of the financial year which has closed. The road has lain continually uphill, the weather has been wet and cheerless, and the Lords Commissioners of His Majesty's Treasury have been increasingly uncheered by alcoholic stimulants. Death has been their frequent companion and almost their only friend. Such is the sombre tale. In fact, I do not recall any Budget 'with which I have been acquainted in the many years I have listened on these occasions which has succeeded in spite of so many adverse factors.

REVIEW OF PAST YEAR.

I have had to face during the last 12 months nearly £26,000,000 of short-falls of revenue or of additional expense—£3,000,000 for Shanghai, £2,500,000 of ordinary Supplementaries, £2,000,000 additional cost of Treasury Bills, £6,000,000 additional interest on Savings Certificates presented for encashment, £3,000,000 loss on Excess Profits Duty, which has indeed actually yielded a minus quantity, and £1,000,000 upon Corporation Profits Tax, £3,000,000 short-fall of the Betting Duty, which many hon. Members no doubt expected, and, last, but by no means least, nearly £5,000,000 failure in the revenue from beer. The fact that the Budget of 1927 should have survived all these blows and actually yielded more than double the surplus forecasted is a striking proof of its internal stability.

This achievement is due to three causes: First, to the increase above the estimate of the Death Duties, which have yielded £9,500,000 more than I budgeted for. That arises largely from the abnormal yield from the greatest estates falling into charge. Secondly, we have had £4,500,000 of windfalls like repayments from Kenya and Palestine. These two heads, Death Duties and Miscellaneous Revenue, together counter-
balance about half of my misfortunes. But the Budget would not have balanced and we should have had a deficit, however explainable or excusable, for the third time running, and but for another and still more potent cause. Immediately after the Budget of last year was announced, the Government began an intensive economy campaign in all Departments in order, in the first place, to pay for Shanghai, for which no provision had avowedly been made. This process of having a continuous economy campaign throughout the year instead of a single battle over the annual Estimates has proved most salutary. Upwards of £10,500,000 has actually been saved by the Departments or clawed back from them by the Treasury, from Estimates which had already undergone their annual scrutiny and from moneys which had actually been voted by Parliament.

Therefore, I submit and I contend that it is not entirely, or even mainly, good luck, but hard work and ceaseless scraping, which have produced the modest but not unwelcome surplus of about £4,250,000. I should like to express my acknowledgments to all my colleagues, without whose goodwill and energetic co-operation these savings could not have been secured. Encouraged by that success, I propose to repeat the process in the present year and never to let it be supposed again that once the Estimates of the year have been settled that is the end of the business and that there is nothing left to do but to spend the money. On the contrary, I hope the obligation to save money wherever possible in every detail of administration and in every period of the year will be accepted as an abiding and perennial rule in our affairs.

DEBT POSITION AND PROPOSALS.

We have done very well this year in repayment of Debt. The New Sinking Fund was raised above the statutory level of £50,000,000 to the unprecedented figure of £65,000,000. This exceptional provision has been funk realised. In addition, the Budget has borne a payment of more than £15,000,000 for the accrued interest upon Savings Certificates. Taking the New Sinking Fund and the provision for Savings Certificates together, we have actually paid, apart from the realised surplus of 1927,
£80,000,000 this last year, and this figure is strictly comparable to £52,000,000 provided under both heads by my predecessor in office in the Budget of 1924—£80,000,000 compared with £52,000,000. Therefore, I have found in this year, in spite of the difficulties which beset our finance when it began, £28,000,000 more for these two purposes than he in his day was called upon to do. Twenty-eight million pounds is an immense sum, and very hard to come by in these times. When I am scolded, as I usually am, for my many shortcomings, I hope this extra £28,000,000, half the cost of the Royal Navy, devoted to the reduction or prevention of debt may be allowed to plead on my behalf.

The results of these exertions appear somewhat disappointing. Omitting in each case the Death Duty Bonds held by the National Debt Commissioners, the nominal Dead-weight Debt was on the 1st April, 1928, £7,527,000,000, compared with £7,504,000,000 12 months before. That is an apparent diminution of only. £27,000,000, in spite of the operation of the £65,000,000 Sinking Fund. I have before explained that these nominal dead-weight figures are, to a large extent, illusory and that they are no true measure of our actual burden. That burden is more accurately represented by the interest charge upon the Funded Debt, but even this charge has not been reduced in 1927 by the full equivalent of our Sinking Fund repayments. One reason for this is that we have been compelled in the regular course of events to convert a quantity of the 3½ per cent. War Loan raised at the beginning of the War to the higher interest rates which are now ruling, and this alone has involved an adverse effect upon our interest charge of the best part of a million sterling. There are some minor causes with which I will not trouble the House.

The External Debt has been reduced by £6,250,000, and stands now at £1,095,000,000. The Floating Debt has been reduced by nearly £27,000,000 to £088,750,000, which is the lowest figure since the War. 1927 has perhaps been our most difficult year in the sphere of the National Debt. At this time last year, on the bleak morrow of the great coal stoppage, we were faced with over
£555,000,000 worth of National War Bonds all maturing before the 31st March, 1929, and included in this great volume of maturities were very large sums repayable at a substantial premium. This great amount of £555,000,000 has now been reduced to £193,000,000, and towards meeting this largely reduced liability I have £60,000,000 in hand from the issue of 5 per cent. Treasury Bonds last December. So that more than three-quarters of that liability has been disposed of.

These successive maturities, sweeping upon us one after another like ocean waves at a time when the ship was not in a particularly seaworthy condition owing to the quarrelsome behaviour of those on board, have been a serious cause of preoccupation to my expert financial advisers. However, I am glad to say that they report that the worst is now over and that our position for dealing with future conversions has been greatly improved by what has been accomplished in the past year. The recent listing of our 4 per cent. Funding Loan upon the New York Stock Exchange, which arose entirely upon American initiative without the slightest efforts being made by any official authority on this side, and the reception of that stock upon that market, are perhaps not without significance as a measure of the position of British credit.

This is the year and this is the moment when I propose to deal with the whole-question of the Savings Certificates. This admirable form of popular thrift has been wisely encouraged by every Government and by the Leaders of every party. I am glad to say that the tireless activities of the national thrift organisations have prevented, even in the aftermath of the coal stoppage, any serious falling off in new purchases, or any important decline in the vast holdings of the public. Before the general strike the total principal of the holdings of the people in Savings Certificates amounted to £376,000,000. It is £362,000,000 to-day. Why then, it may be asked, have we had to pay on account of interest on certificates encashed £15,000,000 this year instead of £7,000,000 which was sufficient in the days of my predecessor or in the first year of the present Government? The chief reason is, that we are not only entering the period 10 years from the date when the
largest sales of these Certificates took place, that is to say, the last year of the War and the period of inflation which immediately followed it, but still more that the Certificates which are now presented for encashment carry with them in an increasing proportion accrued interest for 10 years or more instead of for the shorter periods which previously were common. The system by which every Government has sold Savings Certificates to the utmost of its power in every year during the past 10 years has really been a system of new borrowing upon short-term securities payable with accrued interest at five or 10 years' date. The whole of this story was fully explained to the Colwyn Committee, who recommended no change in the practice which all Governments until then had followed. Their carefully phrased, judicially conceived remarks upon the subject, which are, no doubt, familiar to every Member, will be found in paragraphs 70 and 998 of their Report.

4.0 p.m.

Nevertheless, the time has come when the problem of the Savings Certificates must, receive new and radical treatment. It has been calculated that the new interest liabilities incurred by the annual sale of Savings Certificates would have been fairly equated by a provision beginning in the early years of a cumulative interest payment of £20,000,000 a year. If £20,000,000 a year should have been provided on account of the Savings Certificates, new indebtedness has in effect been incurred by the State to the extent in any year of the difference between the sum actually provided and that figure of £20,000,000. This difference has, as the Colwyn Committee pointed out, always constituted a direct diminution of the Sinking Fund. The time has come, however, when we must put this whole business upon a sound foundation. It is remarkable that the Government of Northern Ireland provided from the very outset an annual Sinking Fund towards the new interest liability incurred by their scheme of Savings Certificates, and we must as speedily as possible follow their excellent example. I cannot pretend that this episode, this story, constitutes the strongest feature of our post-War finance. I took the system as I found it and the extraordinary
difficulties of the last two years have hitherto made it impossible for me to change it, but if I am reproached I shall exclaim with Burke: "If I have erred, I have erred with the Snowdens and the Homes, and with the hereditary virtue of the whole House of Chamberlain."

But I have another disclosure to make which is of a more cheering nature. At the same time that we have been incurring indebtedness through the sale of Savings Certificates, in derogation of our new Sinking Fund, we have also been making a larger contribution to the repayment of Debt than has generally been realised. There has been an extra and hitherto invisible Sinking Fund arising from the annual repayment by the Dominions of loans made to them in the War. The principal part of those payments is paid direct to the National Debt Commissioners and is used to cancel Debt outside the Budget. The second of these Sinking Funds is the interest on Victory Bonds held by the National Debt Commissioners used directly to cancel Debt. The explanation of this process is technical, and for the moment I will say no more than that these extra and hitherto invisible Sinking Funds together amount in the current year to £6,400,000, and that they strengthen our main Sinking Fund, just as unpaid interest on Savings Certificates weakens it.

I propose to comprise both our unproclaimed shortcomings and our equally veiled virtue in a general treatment of the problem of the National Debt. I have noticed a good deal of anxiety and loose-thinking in recent public discussions of this subject. Even quite high authorities tell us that we are making no headway in paying off our gigantic Debt, and they preach the need of some drastic taxation like a surtax or a capital levy, or the so-called Rignano system which they declare will be urgently required if we are not to be oppressed for an indefinite number of generations by this crushing burden. Of course, these fears and their supposed remedies are both equally futile. We have only to go on paying the same sum as we are paying now steadily and punctually, and the Debt will be extinguished within the lifetime of some of those who are now listening to me.

I propose to recur to the policy instituted in Mr. Disraeli's Government by
Sir Stafford Northcote, in 1875, with the full support of Mr. Gladstone, whose private secretary in early days Sir Stafford Northcote had been, and to establish a fixed Debt charge for all the services of the Debt including the Sinking Fund, so that as the interest charge falls through the working of the Sinking Fund, the process of amortising the Debt will grow ever more rapid. The fixed Debt charge set up in 1875 endured for 39 years. It endured in fact, until it was engulfed in the Great War. It was advocated as a policy, and accepted by both parties, although I regret to say that both parties in that long period from time to time—in all, or five distinct occasions—were guilty of making inroads upon the fixed Debt charge, which, in the parlance of those primitive times were coarsely described as "raids."

I propose to establish a fixed Debt charge, and I propose to put the figure at £355,000,000 a year which compares with Sir Stafford Northcote's Debt charge of, I think, £28,000,000 a year. This sum will comprise all our assets and will cover all our liabilities. It will provide the amount of £51,000,000 required to meet the specific Sinking Funds on certain Government stocks, and, taking into account a reinforcement which I will mention later, it will also provide the average £20,000,000 a year required for the interest on Savings Certificates. The interest saved by the annual repayments of Debt and any economies which may be effected in the administration of the Debt will each year be automatically added to the Sinking Fund. I propose, as far as I have anything to say to it, that the Income Tax payer shall look forward to any relief which may be yielded by the conversion of the Debt or any large portion of the Debt to a lower rate of interest. He has that hope for the future. That is not included in the calculations of the fixed Debt charge. All the rest of the annual sum will continue to roll up until, or unless, the day dawns when some unholy hand is laid upon it. The payment of £355,000,000 a year, if steadily maintained, even if the rate of interest falls no lower than 41 per cent., will extinguish our entire Debt, internal and external, including our Debt to the United States, without any addition to
present taxation in a period of exactly 50 years.

AMALGAMATION OF NOTE ISSUES.

The Committee will naturally wish to know how this very large charge meets the obligations of the present year, and of the years which immediately follow. But before I unfold this, I have a further important announcement to make which has an unexpected bearing upon the provision for this year's Sinking Fund. In the first Budget which it was my task to present, I announced the return of this country, and indeed of the British Empire, to the Gold Standard. The time has now come to take a subsidiary step for the management of our currency system which was announced when the Gold Standard was reinstituted. The amalgamation of the Currency Notes with the Bank of England Note issue will take place in the present financial year. A Bill for this purpose will be introduced by the Financial Secretary at the earliest convenient opportunity. I will not, therefore, attempt to discuss the question of the details, or indeed the general principle of the proposal now. It will probably be sufficient if I confine myself to saying that when the Bill is published it will be found that a greater elasticity is provided for the Bank and the Treasury acting in unison than was permitted by the pre-War system.

As to the machinery, the Bank of England will take charge of the present Note issue and of the assets held against it. The profits on the issues, less expenses, will remain secured to the State. The assets will be taken by the Bank at their present value, and we shall not, of course, hand over the reserves accumulated by the Treasury against the possibility of future depreciation. These reserves, which are the property of the taxpayer, are considerable. They amount to £13,200,000. What is the position of these reserves? They are real assets; they are the fruits of past saving. Obviously, they cannot be used to meet current expenditure. I propose to use them as a special means of strengthening the Sinking Fund for this year, and of inaugurating the new Debt Redemption scheme. To this sum of £13,200,000 I shall add £800,000 from the general resources of the Budget in order that, added
to the £51,000,000 which I have already mentioned, it may carry the Sinking Fund again this year to the record figure of £65,000,000 at which it was placed last year. This, I am sure, will be the course most conducive to the national credit and our interests at home and abroad.

I will now give the Committee a six-year forecast of the operation of the fixed Debt charge of £355,000,000, showing what provision will be available in each year for the new Sinking Fund and for the interest on the Savings Certificates. I take six years for a particular reason. I take it, as that six-year period includes the year 1933, when our War Debt payment to the United States of America increases by £4,000,000. I will, first of all, state the amounts available in the accumulator for 1928 and the five years following for Sinking Fund and Savings Certificates combined. In 1928, for these two objects, the Sinking Fund and the Savings Certificates, the provision will be £78,500,000; in 1929, £60,500,000; in 1930, £69,000,000; in 1931, £72,000,000; in 1932, £73,500,000 and in 1933, £71,000,000. I will pause over the figure of £78,500,000 for 1928. It is a great figure because the accumulator is fortified by the extra £14,000,000 from the Currency Note account to which I have alluded. The figure which the right hon. Gentleman opposite provided in 1924, even if I include the unrevealed or invisible Sinking Funds which accrued in that year, amounted only to £57,000,000. We are now surpassing the 1924 figure, not indeed by the £28,000,000 of last year, but by no less than £21,500,000.

I return to the figures of the six-year period which I have just stated to the Committee. The Committee will see on the card which they have before them a line which is marked "average," and lines for three more figures which I will now give. On average the figures produce £71,750,000 for the Sinking Fund and Savings Certificates combined. The specific sinking funds earmarked to particular loans alone require an average of £50,250.000. This leaves an average provision for the whole six years' period of £21,500,000 available for Savings Certificate interest or for further Sinking Fund. That is the figure for the line marked "balance" on the card. The Government Actuary who, at
my request, made a detailed examination of the whole of this problem, has certified to me that the full annual provision on the average of the next six years required to meet the interest accruing on the Savings Certificates is £20,250,000. Thus a fixed debt charge provision of £355,000,000, fortified this year by an addition of £14,000,000, will, during the next six years, not only meet the statutory and fiduciary requirements of the new Sinking Fund, but will cover the whole provision actuarially required for the Savings Certificates, with a free margin of £1,250,000 a. year. I trust that upon examination the Committee will feel that that is a prudent and reasonable arrangement, and one which will give our National Debt service a solid and regular framework, without any undue burden on the taxpayer in any particular year.

EXPENDITURE, 1928.

I come now to the expenditure of 1928. I estimate the Consolidated Fund Services as follows: Debt—£355,000,000, setting aside for the moment the special addition of £14,000,000 to the Sinking Fund, to which I have referred. Road Fund— £21,500,000, an increase of £2,000,000 over last year. Local Taxation Account—£14,200,000. Northern Ireland Residuary share £5,400,000. Other Consolidated Fund Services—£2,600,000. That brings the total of the Consolidated Fund Services to £398,700,000. The figures for the Supply Services have already been laid before the House at a total of £407,495,000. Thus the total estimated expenditure for 1928. on the above basis, becomes £806,195,000. This figure compares with the estimate of £833,390,000, which I made this time last year, and with £838,535,000 actually spent last year. This is a reduction of £27,000,000 from the estimated, and £32,000,000 from the realised expenditure of last year. I have, however, on numerous occasions pointed out how very misleading such figures are unless they are analysed. [Interruption.] We have had the greatest difficulty in persuading hon. Gentlemen opposite to analyse them when they appear to trend in a direction which supported some particular argument that they were advancing; but I have always said that the figures should be analysed. In the analysis it is essential that the profitable
and the self-supporting services and the provision for the extinction of debt should be separated from the ordinary cost of carrying on the government of the country.

NEW FORM OF ACCOUNTS.

In order to present a clearer picture I have this year adopted a new form in the presentation of our accounts. In the first place, I have presented them net instead of gross. Following a suggestion of the Estimates Committee of the House of Commons, I have given directions that in future the sums received from the sale of fee stamps shall be appropriated in aid of the respective Votes instead of being brought into the Exchequer. The contributions received towards the cost of teachers' pensions will be shown as an appropriation in aid of the Education Votes. By the Unemployment Insurance Act of last Session I obtained the power to direct that the interest on the outstanding debt of the Unemployment Fund should in future he paid direct by the fund to the National Debt Commissioners without passing through the Budget. In certain cases where the cash outstanding on Government funds is temporarily borrowed for the use of the Exchequer, and where any interest paid merely accrues as revenue to the benefit of the Exchequer after having first appeared as an expense on the other side of the account, it has been decided not to raise any formal charge for interest future. These are all minor, but not unimportant accounting changes, which affect about £7,000,000 of revenue and expenditure, the object in each case being the same, which is to remove from both sides of the account items which exactly balance and cancel each other. According to the doctrines of Sir Robert Peel and Mr. Gladstone, the presentation of gross estimates was to he encouraged, and respectable reasons can be found for it. But as the consequent meaningless inflation of the total figure has proved a stumbling block to a numerous tribe of political quadrupeds, I have thought it desirable on this occasion and for the future to make a change.

The total estimated expenditure for 1927 was, as I have said, £833,390,C00 But had the changes just mentioned been in force in that year, the figure
would have been £826,326,000 net. The corresponding total for 1928 is the figure that I have already given, namely, £806,195,000. Therefore the reduction, comparing like with like, is £20,000,000, and that is due to economy on the Supply Services and to the revision of the debt arrangements. I do not intend the reform in the manner of presenting our accounts to stop at this point. It is a matter of common agreement between the financial authorities of all parties, I think, that the growth in the self-balancing expenditure of the Post Office and the Road Fund grants ought not to appear in our accounts en precisely the same footing as an increase in ordinary burdensome expenditure. That is the general view; it has appeared in the Liberal Yellow Book. Even more absurd is it to present as if they were extravagances increases made in the sums allotted to the Sinking Fund.

The changes which I propose are of the simplest character. In the statement of ordinary revenue and expenditure I leave only the surplus of the Post Office and the excess of the Motor Vehicle Duties over the Road Fund grants. The Post Office expenditure and the Road Fund Grants are shown quite separately as self-balancing items. The amount of the Sinking Fund provision will also be kept outside the total expenditure and shown in its proper place, namely, beside the prospective surplus of the year. Re-stated in its altered form, the expenditure of 1928 is as follows: Supply Services, exclusive of Post Office, £350,000,000. Consolidated Fund Services, excluding Road Fund Grants and Sinking Fund, £326,500,000. Total expenditure, £676,500,000.

There is no difficulty in casting former Budget results in the new form, and I will give the Committee the figures. In 1923, the total was £691,000,00; in 1924, £682,000,000; in 1925, £701,000,000; in 1926, £698,000,000; in 1927, £681,000,000; and in 1928, £076,500,000. The totals for 1927 and 1928 are Estimates; for earlier years they relate to Audited Expenditure. These figures, which are all calculated fir the same basis, excluding what I have said—the Sinking Fund, the Road Fund, and the Post Office—represent more accurately and
reasonably the actual cost of government and the increase or decrease in the real burden on the country in our accounts. Whatever arguments we may have, it is much better to get on a sound and sensible basis. But the accusations of extravagance, which have been so freely made against His Majesty's Government, force me into another comparison with the finances of our predecessors in 1924. I do not make the comparison in any mood of reproach, certainly in no mood of reproach against the right hon. Gentleman the Member for Collie Valley (Mr. Snowden). On the contrary, I choose 1924, not because it was a bad year but because it was a good year, because it was a year in which, by general admission, the National finances were well and strictly administered. Therefore, it is quite legitimate to make the comparison.

For this purpose of comparing 1928 with 1924, it is necessary not only to exclude the increases of the Road Fund and Post Office expenditures and the increases in the New Sinking Fund, but also the provision for the Savings Certificates which are, as I have shown, intimately connected with the Sinking Fund. Making these deductions, and these deductions only, the audited expenditure in 1924 becomes £675,000,000, and the estimated expenditure of 1928 is £663,000,000. If this estimate is sustained—and after the experience of last year I have no doubt it will be, for apart from the Savings Certificates we spent less than our original estimate—if this estimate is sustained, 1923 will show a reduction of £12,000,000 on 1924. A reduction of £12,000,000 effected in four years is not all that I aimed at, but nevertheless it is a substantial fact and it ought not to be under-rated. It is certainly a good deal better than the increase of £30,000,000 or £40,000,000 of expenditure for which we are usually blamed, sometimes by highly competent critics, and I am entitled to use this argument to show what the true facts of the position are.

Not only have we reduced the expenditure of the Labour Government by £12,000,000, of which £5,500,000 is a reduction of expenditure upon Imperial defence—I say this to those who are so eagerly endeavouring to cut still further that provision—but at the same time
we have provided very much larger stuns for the social services. Nearly £13,000,000 more has been required to pay for widows' and old age pensions, for over £5,000,000 of which we ourselves are, no doubt, responsible. Some £4,000,000 extra has been provided for sugar beet and over £7,000,000 extra has been supplied in grants to local authorities for education, housing and health services. Against this there are, of course, to be set the very large but lesser automatic savings, resulting from the decline in war pensions and the Debt interest. Nevertheless, the fact remains that the additional £24,000,000 of increase for beneficial services has been provided not only without increasing the total expenditure but actually while reducing it by £12,000,000.

We are to-day beginning the financial discussions of the year. We have six or eight weeks of financial business before us. I shall place in the Vote Office tonight a special Paper comparing item by item the expenditure of 1924 with the expenditure of 1928, showing the reductions which have been effected on the strictest comparison of like with like. I ask that these figures should be examined. I ask that they may be subjected to a meticulous scrutiny. If they can be upset in those six or eight weeks I will admit my error, but if they cannot be upset then I submit that they should be adopted as the basis of future arguments upon the question of economy by all those who wish to avoid what Hazlitt called
The ugly trick of writing things that are not true about people you do not like.

CIVIL STAFF REDUCTION.

It is imperative to persevere in reducing expenditure because the pensions and the housing grants grow automatically every year. There is—I am sure those right hon. Members opposite who have held high offices under the Crown will agree with me—no surer method of economising and saving money than in the reduction of the number of officials. Last year I stated that the Government proposed to effect such a reduction by restricting new entrants into the Civil Service. In consequence a programme of definite reductions has been prepared under my directions by the Civil Departments, in collaboration with the Treasury. From the time that this Government took office up to the 1st April, 1927, the total
number of officials had been reduced by over 7,000. The new plan contemplates a five years' scheme of further reductions starting from that date, during which period 11,000 more posts are to be suppressed. Those 11,000 posts constitute 18 per cent, of the total numbers in the departments affected by the scheme. I shall place a paper in the Vote Office to-morrow giving the main departmental heads under which those reductions will be effected, and postulating certain conditions indispensable to its success. One condition is, of course, that new legislation to which the House assents requiring additional officials will constitute a diminution of the reductions which we have fixed. The figures which I have mentioned relate only to the Civil Departments, but the possibility of reducing the number of posts in the Defence Departments is also being actively pursued. While I am not in a position to announce any results to-day I am sure that I can express on behalf of the House air earnest hope that that pursuit will be attended by substantial and early results. So much for expenditure.

REVENUE, 1928.

I now proceed to estimate the revenue of 1928 on the existing basis of taxation. Customs and Excise show little or no resilience. The consuming power of the people is increasingly being directed into new channels, but Customs and Excise move forward slowly by £2,000,000 or £3,000,000 a year in accordance with the growth of the population and the general maintenance of the consuming power of the people. The chances of a reasonably decent summer or, perhaps, I ought to say the chances against an immediate repetition of what we had last year, favour a recovery in the revenue from beer, which emboldens me to repeat my estimate of last year, apart from the extra month's revenue which accrued to us in consequence of the curtailment of the brewers' credit. Spirits, on the other hand, hold their own somewhat better under bleak conditions, but they roust be expected in normal weather to resume their continuous descent. The increased duty upon tobacco more than realised our expectations. That is certainly satisfactory when we remember that cigarettes, which comprise three-
fourths of the tobacco consumption, have not been increased in price. The group of new luxury taxes on silk and on the McKenna imports show, on the whole, an increase. The same may be said, broadly speaking, about the various Safeguarding and Key Industry Duties. This class of taxation which is producing in the aggregate a very substantial revenue has not, generally speaking, been attended by increases in the cost to the consumer, and has certainly had no adverse results on the employment of the people. It may well be that a much more favourable statement might be made and might be effectively sustained upon this aspect on a more controversial occasion than the present.

As regards the Betting Duty, certain sections of the bookmakers, as the daily Press have not failed to make known, have urged me to remodel the Duty by lowering the rates of tax en turnover and by instituting a graded schedule of licence duties on the bookmakers. I have given a great deal of thought to the subject and to the representations that have been made to me and I am convinced that the new system would not yield the money which the Exchequer requires and intends to obtain. Moreover, the bookmakers are not agreed among themselves. Anyhow, it is better to await the results of the discussion on the Totalisator Bill before taking a new survey of this particular item in our taxation. I trust that as the Customs and Excise officers obtain more experience of the working of this Duty they will succeed in checking more effectively the evil of evasion. Accordingly, I am estimating for a yield of £3,250,000 this year as against the £2,669,000 which were received last year. There remain the duties on tea and sugar, those primary and basic comforts of the masses of the people and the poorest in the land in which there have already been great reductions of which the right hon. Member for Colne Valley is, no doubt, justly proud. I trust that these duties may be progressively diminished. I will not say more as to their yield in the coming year except that they may be expected to respond to the slow upward growth of the consuming power.

MINOR CHANGES IN CUSTOMS AND EXCISE DUTIES.

Although I am dealing with the existing basis of revenue, I think it would be convenient, though perhaps it is a little exceptional in the order of the Budget statement, to mention here certain minor changes in Customs and Excise Duties. The Customs Duty on British wines instituted last year was fixed at 1s. a gallon. I am sure that it could be prudently and fairly raised to 1s. 6d. a gallon, which will yield an additional £65,000 this year and £70,000 in a full year. That increased duty will take effect from to-morrow. I propose that as from the 28th April there shall be a Customs Duty upon mechanical lighters of 6d. and a corresponding Excise Duty of a similar amount on homemade mechanical lighters. The yield of this duty will be only £40,000 this year. Its object, of course, is to preserve the efficiency of the far more important Match Duty, from which we get several millions revenue each year, by curtailing the use of mechanical lighters.

I propose to make a very small change, the cost of which is unappreciable, some £350 a year, in the Customs Duties on cinematograph films, in order to place British Empire films on the same footing as those films which are produced abroad by British residents. The Committee appointed under the Safeguarding of Industries procedure unanimously recommended the imposition of a Customs Duty on buttons—buttons used for fastening or decorating apparel. I propose, therefore, as from the 28th April that a duty of 33⅓per cent. ad valorem shall become chargeable on such articles. This will not mean that buttons already on imported garments will be charged the duty. The duty is estimated to bring in revenue to the extent of £130,000 this year and £200,000 in a full year. With these variations, the total Customs and Excise revenue comes to £113,067,000 and £139,018,000 respectively.

INLAND REVENUE.

I turn to the Inland Revenue. I cannot expect that the Death Duties will repeat in 1928 the exceptional advance they made in 1927.

Mr. W. THORNE: Why not?

Mr. CHURCHILL: It is no lack of good will on my part. Nevertheless, in this field there is a definite expansion, and I estimate that the yield in 1928 will amount to £72,000,000. The Excess Profits Duty, which yielded in 1926 £2,500,000 more than I expected, fell away last year to less than nothing. There is a great heap of claims by the Exchequer, aggregating nearly £80,000,000, against which there are indefinite counter-claims. The cases are dealt with as rapidly as possible, and it depends on pure chance whether the resulting decisions yield in any given year results favourable or unfavourable to the Exchequer. There is this important difference, that whereas a counter-claim given against the Exchequer is met at once out of revenue, there are many claims in which the Exchequer succeeds against persons who have not only lost their excess profits, but everything else as well. In all the circumstances, I have with some hesitation included £1,000,000 from the Excess Profits Duty, and I cannot estimate for more than £1,500,000 for the expiring remnants of the Corporation Profits Tax. Stamps, which yielded £1,000,000 above the Estimate last year, may in the present speculative activity be expected to produce an additional £1,000,000, and I put them at £28,000,000.
I now come to the staple, the Income Tax. The Committee will remember that last year I had to write down the estimate of the Income Tax by £21,000,000 on account of the general strike and coal stoppage. As I then stated, I had to face in the present year a loss from the same cause of nearly £7,000,000. I looked forward to the improved trading conditions of 1927 to make up for this handicap, but the recovery of the Income Tax has not by any means come up to my expectations, still less to my hopes. The Inland Revenue authorities have received considerable assistance from trading concerns in making their forecasts of profits, and it is worthy of note how very close the estimate of last year turned out to be in actual practice, having regard to the fact that we are no longer on the three years' average but on the basis of the previous year. The Inland Revenue estimate of the profits in 1927,
which are, of course, the basis of the tax in 1928, although better than 1926, the coal stoppage year, actually falls short of the profits in 1925 instead of showing the improvement I looked for. The significance of this result will be apparent to all. Even when allowance is made for the fact that some of the trading profits of 1927 will relate to accounting years which may have commenced in the period of the coal stoppage, nevertheless the result is disquieting. It is clear that the injury done by the industrial civil war to the means of earning the national livelihood, and the consequent injury to the national revenue which resulted there-from, is very deep and lasting. It was a wound felt like so many ordinary wounds, less painfully on the battlefield at the time than afterwards in the hospital. The consequences will long he with us. Moreover, in 1928 I can no longer count on that acceleration of Schedule A payments which saved us from additional taxation last year. That measure was estimated to produce, for one year only, an extra sum of £14,800,000. It succeeded beyond all expectations. Nearly £17,000,000 has, in fact, been gathered. The collection has proceeded with more rapidity than in any previous year when only half of the whole Tax was paid in January, and scarcely a single complaint has reached the Treasury, although we were dealing with the affairs of 11,000,000 hereditaments. There is, of course, no anticipation of this year's revenue, as people continually imagine, because of the Schedule A decision taken last year. That trouble will not, as I explained, arise until the world's end. Nevertheless, we now revert to the normal, having expended in our distress a valuable and important reserve. In all these circumstances I cannot put the yield of Income Tax in 1928 beyond the figure of £225,000,000.
Super-tax follows a year behind Income Tax, and it is therefore even more involved in the disasters of the strike and stoppage year. It fell somewhat short of the estimate in 1927, and I cannot count on more than £60,000,000 on this occasion. The foregoing, with the Land Tax and various minor items, give a total Inland Revenue figure of £398,350,000.

MISCELLANEOUS RECEIPTS.

The receipts from the Motor Vehicles Duties I estimate at £26,500,000. For
the moment I am giving gross figures in order that hon. Members may enter them on the Blue Paper which is in the old form. The total receipts from taxes will, therefore, be £677,535,000. The gross receipts from the Post Office I estimate at £65,500,000. The revenue from Crown Lands may be put at the usual figure, £1,100,000. In Sundry Loans and Miscellaneous Revenue we have to note the increased receipts resulting from the settlement of Allied Debts, and from the payment of reparations under the Dawes scheme. It is very interesting that these important factors now aggregate in the present year to nearly £32,000,000, which is not far short of the £33,164,000 to be paid by us in the coming year to the United States of America. My mind goes back to the first speech I made in this present Parliament, and I put it to other hon. Members in whose recollection that episode may lie, whether if we had been told that we should have achieved almost complete equipoise between what we receive and what we have to pay during the present year they would not have been frankly incredulous at such a thing. I am sure the right hon. Member for Colne Valley would have gladly rejoiced at that time if he had thought there was any prospect of such a result. [Interruption]. Much credit is due to those who took a part in the agreement which rendered the Dawes plan possible. Why should we not be ready to give a little credit to each other instead of simply handing out bricks?

Whereas when we took office Miscellaneous Revenue consisted largely of dying elements like the sale of war stores and war properties, the loss of these assets is now to a large extent made good by annual resources which we have every reason to expect, and every reason to insist, shall not be less enduring than our American obligations. I put Sundry Loans at £27,650,000 and Miscellaneous Ordinary Receipts at £13,550,000. That is a large drop because the Road Fund surpluses do not appear this year. Special Receipts I put at £27,162,000. On the old form of accounts we should thus have £812,497,000 gross revenue and £806,195,000 gross expenditure. Adopting the new style of accounting which omits the Post Office and Road Fund from the account, in so far as they are self-balancing, I have to meet an expenditure, including the Sinking Fund, of
£727,381,000, and I have available revenue of £733,683,000. There is, therefore, a prospective surplus of £6,302,000 without taking into account at all the extraordinary item of £13,200,000 from the Currency Note Reserve, which will be used for the further cancellation of Debt. From this prospective surplus I deduct the addition of £800,000 I have made to the new Sinking Fund in order to raise it to the total figure of £65,000,000, and the provisional prospective surplus thus becomes £5,502,000.

Considering that we have lost this year no less than £34,000,000 of windfall revenue which we enjoyed last year, and that we are able with the help of the Currency Note Reserve to provide a new Sinking Fund of £65,000,000, that no additional taxation of any kind is needed to pay our debts or to pay our way, and considering that after this year we shall fairly turn the corner of recovery from the stoppage period; considering all these things, and they are fairly large things, I think the Committee will probably be inclined, not indeed to express any enthusiasm or satisfaction—that I should not look for—but at any rate to feel in their hearts, however much they may repress the expression of such sentiments, that anyhow things might easily have been worse.

RATING RELIEF.

5.0 p.m.

If I were only dealing this afternoon with the financial requirements of His Majesty's Government and the means of satisfying them, I should bring my tale to a speedy conclusion; I should sit down almost immediately and escape thus easily from the Budget of 1928. As it is, I must warn the Committee that our joint ordeal is not yet half completed, and that by far the most important and controversial part of our task must now begin. Here I shall invite the Committee, at the outset, to open new ground. During the last three years, the decline in the cost of living has reached a total of 10 points. That is of immense benefit to the people. According to the calculations I have had made, the advantage gained by the wage-earning mass of the nation from a decline of 10 points in the cost of living may, after making full allowance for any wage reductions which have occurred, be com-
puted at not less than £100,000,000 a year—not a fact to deplore. A far less satisfactory picture is presented by the heavy basic industries, which have the greatest responsibilities in the employment of the people, which are most directly in contact with labour unrest, which are most unsheltered from foreign competition, which are most markedly charged with our elaborate social services, and which are principally affected by the high costs of our sheltered transport trades.

The general strike and the coal troubles account for a great deal of the immediate evil, and their effect will slowly pass both from industry and finance. We have, however, to face the fact that unemployment remains obstinately chronic around the dismal figure of 1,000,000, and that all those basic industries which used to he the glory of this island, which must always constitute an essential element in the life of every nation, and which are vital to our export trade—all those industries are at the present time in serious eclipse. Various remedies have been suggested. Some say they should be nationalised, others say they should be protected, others again advise the rationalisation of industry and are strenuously endeavouring to promote co-operation and good will. On every side and among men of every type there is a conviction, and, I trust, a resolve, that a new effort should be made to impart a vigorous impulse to the efficiency and volume of British production. The removal of invidious burdens constitutes no favour. If the burdens are found to be invidious, their removal is an act only of policy and justice.

Our system of local rating; dating from the 16th century, is wholly inapplicable to modern industrial production. The practice of levying local taxes on the tools and plants of production is, in its nature and essence, economically unsound and even vicious. The rates enter directly into the cost of production and affect our competing power at home and abroad. They vary in weight with every district and with the local politics of every district. They fall with progressive severity upon an industry in proportion as it uses bulky tools and extensive premises, and consequently in rough proportion to the number of wage-earners
for whom it provides a livelihood. They fall the heaviest upon industry when it is most depressed and making little or no profit, or even running at a loss, and when only a small portion of the plant, upon the whole of which it has paid rates, is in fact in profitable use. According to the latest ascertainments, every one of our colliery districts shows a net loss on working, and yet the industry is being required to pay several millions a year in rates. In other depressed industries a quarter or even a third of the wage-earners are employed at this moment by firms that are either working at a loss or making profits less than the rates they are paying. Many hundreds and thousands of wage-earners—certainly much more than a million—after making painful sacrifices of hours and wages, are at this moment working for businesses which are very near the verge of closing down, and which in this precarious state are forced to pay heavy rates out of dwindling capital. How long is that likely to be able to go on?

These evils manifest themselves in another direction. Under our present arrangements, when the industries of a district flag, unemployment, distress and pauperism increase, and to meet them the rates arc raised. These higher rates aggravate the trouble of the failing industries; more unemployment results, and what with the ever-growing burden of the rates and the atmosphere of discontent caused by distress—always the cause of discontent—industry flies from these districts or else dies within them. Who would start a new factory in such a district? On the contrary, we frequently see industries shifting outside the heavily-rated areas and starting afresh, with a needless capital outlay, in grass meadows without population or communications. They then demand motor roads to bring, at uneconomic expense, workmen to the scene and to deliver their products to the market; they demand new houses, subsidised by the State, for a new community. Frequently we see a factory—and the practice is growing every day—erected just outside the boundaries of some poor district in order to escape being made a milch cow. The whole impulse is for industry to quit these melancholy areas and leave behind them political agitation, State assist-
ance, and a forlorn mass of derelict humanity.

Yet, after all, many of these necessitous areas, but for the rates, the pauperism, and the political consequences of distress, would be quite good places for old-established businesses to thrive in and even for new ones to be founded in. Here it is that the working population have their homes, their institutions, their schools, their churches, their chapels, their recreations, their shops, their gas and water connections. How much better to bring industry back to the necessitous areas than to disperse their population, at enormous expense and waste, as if you were removing people from a plague stricken or malarious region! The evil is progressive. Take, for instance, one district whose case we have examined in detail. I will not name it, because there is no point in entering upon a local argument. It is a district which had nearly 40 collieries. Four years ago, after 15 of them had already closed down, the remainder were still paying over 20 per cent. of the rates of the district—the total rates. Since then six more have been compelled to shut down, and, owing to the consequent distress and loss of rates from those collieries, the burden falling on the other collieries and on the other ratepayers in the district has increased by no less than 6s. in the £. You can tell a similar story about any Lancashire town where spindles are being steadily reduced. Whenever one factory falls out of the ranks, the pressure on those remaining progressively increases. There follows a gradual but increasing exodus of enterprise and of industry from the places where the working people live and where they have their institutions. There follows that movement, already clearly discernible, from the industrial North to the politically more settled and less highly rated South. There follow all those acute problems of distress connected with what are called the necessitous areas, which, under the existing system of local government, can only be palliated by loans and doles.

The burden of rates on industry is cumulative. Coal (rated) is converted into coke (rated again), and used with iron ore (rated) and limestone (rated) to make pig iron (rated again), and this, with more coal (rated) and other rated products, is used to make steel (rated
again). I am told that the average burden on steel from the rates is over 4s. a ton. That is the average burden, but in many cases, where in the districts the rates are very high, in districts where there is distress, the burden is far greater. Upon this darkening scene another set of evils arrive. All these commodities that I have mentioned need to be transported, usually by rail or water, and at each stage more rate burden is added. The railways pay over £7,000,000 in rates. They are sheltered from foreign competition, but inside this island the railways are confronted with the strong competition of motor vehicles. This limits their powers to pass on the burden so far as the passenger or light goods traffic is concerned, but the heavy traffic of the basic industries, which have no alternative means of transport, remains inevitably at their disposal. I am not blaming the railways; I am stating the facts. The Balfour Committee reports typical cases in which the total rail charges entering into the cost of pig iron in 1925 amounted to 23s. 5d. a ton, or 29 per cent. of the total market price.

Thus, at every stage in the progress of basic products till they finally reach the ship for export, or reach the home consumer, the rates add to the price, and they add to the price irregularly, unequally, and injuriously. I am not, of course, suggesting that the present difficulties of British industry or the distresses of the wage-earning population in certain areas will be cured completely by any relief that can be afforded upon the rates. On the contrary, the opportunity of any rate relief which may be given ought to be used by every depressed industry to set its house in order and to make a new effort at a favourable moment. Coal, cotton, iron, steel—in every one of these industries, very great efforts, quite apart from any outside assistance which the State may give, are needed at the present time. Capital and Labour should take occasion by the hand, and endeavour to turn a substantial aid to permanent effect. We boast no panacea, but we are sure that the relief of the rates upon production is the first, the most obvious and the most urgent remedy which Parliament can apply. This, if I may judge by the de-
clarations of leading men in industry and politics, is common ground between all parties. We may differ about the remedies, but we are largely agreed upon the diagnosis. A clear distinction can be drawn between productive industry and the distributing trades. Productive industry is exposed, in the main, to worldwide competition. It cannot recoup itself from the consumer. Productive industry employs three-fourths of the weekly wage-earners and accounts for not far short of nine-tenths of the 1,000,000 unemployed. The distributing trades, according to every test which the Inland Revenue can apply, have not suffered, but, on the whole, have prospered in the last 10 years and the revenue raised upon their profits has not diminished. On the contrary, it has increased and is still, I am glad to say, increasing.

Accordingly—taking this view and having profited by what I have heard in the Debates in this House during this Parliament, and having laid to heart every counsel that was offered in sincerity—at Whitsuntide last year 1 proposed to the Prime Minister that, as the concluding financial effort of this Parliament I should try—the Committee will excuse a military metaphor—to form a mass of manœuvre of £20,000,000 to £30,000,000 a year for a great operation upon the rates; and, secondly, that this effort should not be frittered away over the whole front but should be concentrated upon the relief of the sector occupied by the producers in town and in country. Ever since then all the Departments of State concerned have been at work. Our plans are now complete and we believe them to be practicable. The time for consideration has passed; the time for action has come and we shall begin this afternoon. I may say, parenthetically, that in what is beginning to be a rather long and certainly a very varied experience of administration, I have never known a policy more searchingly examined and prepared, but I must also say that in a business of this immense complexity, touching at, so many points so many interests, and producing reactions of all kinds in every direction, it is quite certain that the Government will require the help and the guidance of Parliament at every stage. No doubt suggestive and constructive criticism will reveal in the next few months a great many things
Which could never be foreseen while our discussions were confined to the secret circle of the Government, their officials, and their confidential advisers. Therefore we shall welcome the help of suggestive and constructive ideas from any quarter, if it is offered in a sincere desire to arrive at the best result for the country as a whole.

The policy will proceed in three main stages. First, the gathering of the money necessary for the relief of the rates upon the producers; secondly, the defining of the scope and direction in which that relief should be applied; and, thirdly, the reimbursement of the local authorities for their loss in rateable value. These are the three stages and with each of these I will now proceed to deal. But the Committee will follow the account much more easily if, at this point, I inform them of the time-table which the Prime Minister has prescribed and which indeed the physical necessities, the temporal necessities, of Parliament require. The first stage is the provision of the money arid that is what we are going to do now. The second stage, the direction of the relief, will require a Bill which will be called the Valuation (Ascertainment) Bill. This will be introduced by my right hon. Friend the Minister of Health as soon as possible after the Budget resolutions arc disposed of. Twelve months will be required after that Bill is passed, to enable the new valuation to be made for the purposes of de-rating. While this is going on, and when we meet in November, the third stage of the policy will begin. The Minister of Health will then produce the main Local Government Bill dealing with the reimbursement of the local authorities. Advantage will be taken of this unique opportunity to carry out those reforms in the local government system which are long overdue and upon the principle of which the Government have already reached definite conclusions. The interval will be occupied in consultation with the local authorities with a view to securing their active co-operation and dealing fairly with them, having regard to all the circumstances of the present time, social, financial and economic, and to other circumstances as well. This main Local Government Bill of the winter must, inevitably, become the most important Measure of its kind since 1888 or perhaps since 1834.

The opportunity afforded by the relief of productive property from rates will be used to establish a system of block grants subject to quinquennial revision. These block grants will include not only compensation to the local authorities for their loss of rates but will also include the existing percentage grants for health services. They will also include the grants under the Agricultural Rates Acts and the money provided by the Assigned Revenue System, except only such part as is allocated for Education and Police purposes. The percentage grants for Education and Police will also remain untouched, outside the ambit of the scheme at the present time, and so far as the present Parliament is concerned.

As to roads, the grants from the Road Fund for road improvement in all areas, and for the maintenance of Class 1 and Class 2 roads in administrative counties, all continue unchanged. On the other hand, all State assistance towards the maintenance of roads in London and in county boroughs and of non-classified roads in administrative counties will in future be given through the channel and in the form of the new block grant. For this purpose a suitable share of the existing grants and of the growing revenue of the Road Fund will be assigned. Lastly, in order to inaugurate the new system and to mitigate the hard cases and anomalies, inseparable from a great change of this character, there will be an additional grant of new money from the Exchequer over and above what the local authorities are receiving now, and for this purpose I am prepared to find £3,000,000 a year, though, I trust, it will not all be required. This potent fund of money, comprised in the block grants, will be used, not only for reimbursing local authorities, but also for the purpose of securing a gradual but continuous adjustment of the resources of individual local authorities to the needs and the character of the population for whom they are responsible.

The creation of wider areas for certain purposes of local government has long been urgent. The development of transport, the movements of population and industry, the more elaborate standard of technical services now required, have rendered many existing district divisions
unsuitable for the discharge of their functions in respect both of Poor Law and of highways. Unemployment, arising perhaps from world causes, falls with peculiar severity from time to time upon particular trades and areas; and the local resources are not only inadequate for the burdens they have to bear, but they actually diminish with every increase in the weight of these burdens. Obviously it is wrong that the people in any district should be left without the means of providing for the necessary services approved by Parliament, just because they are all poor together and have not got the money. It is equally wrong that any district, so situated, should draw a blank cheque against the Treasury, or that the burden of a poor district should be thrown only upon its immediate neighbours. A broader basis of adjustment is necessary on this account.

Even more obvious are the inequalities and injustices arising from the present system of maintaining the highways. The cities and the towns disgorge, in ever-growing quantities, the motor traffic—light and heavy, pleasure and commercial—for which the local roads were never designed, and to provide for which many existing rural authorities are not equipped with the powers, with the money, or with the technical knowledge. The foresight of some counties like Bedfordshire and Hertfordshire has already shown us in living example the remedying advantages which flow from the adoption of a county basis as the unit of highway administration and charge. In this sphere, as well as in that of unemployment, an advance towards a larger grouping should be made.

Both the Poor Law and the highways require a broader basis of adjustment. But here an interesting and helpful feature presents itself. Either of these questions, treated separately, involves disturbance and considerable disturbance of the resources and the burdens of particular areas. Widening the area of the Poor Law helps, on the whole, the towns at the expense of the countryside. Enlarging the boundaries of highway administration helps the countryside at the expense of the towns. Either of these problems taken separately probably presents insuperable difficulties; but taken together, lapped in one comprehensive scheme, these discrepancies are to a con-
siderable extent cancelled out or neutralised; and with the additional subvention from the Exchequer, which the institution of wider areas of charge renders possible, there is no reason why the double reform should not be achieved, not only without any marked increase in the rates in any area, but with a substantial relief in many highly rated areas and with a large balance of reductions generally, from one end of Great Britain to the other. It will be seen that in what I have just said I am giving two very important indications of the Local Government Bill of the winter. One of them will probably cause certain heartburnings to the class of local authorities who, within their limited resources, have carried a heavy burden far, and the other will give and is intended to give a broad assurance of positive relief to the great masses of ratepayers throughout the island. There are the two indications—larger areas and lower rates; these are the two main features which will characterise the Bill to be presented in the autumn.

The policy which we intend to follow is, of course, directly opposed Go that advocated from several quarters, of transferring to the central government whole blocks of services now discharged locally, like the care of the able-bodied poor. Such a remedy would be at once improvident and reactionary. It would simultaneously sap the vitality of our local government system, and further overload the centralised departments at Whitehall. It would impair local responsibility, throw away valuable voluntary effort, and cut the administration off from local knowledge. At the same time, you would unduly expand the numbers and exalt the functions of State officials. The House of Commons, which more than ever requires time to weigh and debate the supreme issues of national and Imperial policy, would find itself increasingly encumbered with a mass of disconnected duties which ought to be discharged by the county councils, and which the county councils can be easily fitted to discharge. We believe that the devolution of powers and duties, and the building up of strong and well-equipped local unities to exercise them, has still the dominant part to play in our modern domestic progress. In providing these major authorities with new sources of revenue, which will periodically be
brought into fuller harmony with local needs, we are introducing into local government a flexible factor which will provide for the changing conditions of our time, and thus secure for the institutions of local government a fuller measure and a longer lease of active life.

I return now to the time-table. We hope that the main local Government Bill will receive the Royal Assent by Christmas, or at any rate by Easter. On this basis, and provided that the new valuations under the Valuation (Ascertainment) Bill are completed about the same date, the first relief to rates on productive industry will begin in the rate payment of October, 1929. Finally, the fulfilment of the scheme of local government reform will be achieved during the course of 1930. Therefore, there is a long job before us, and it will be only misleading the Committee and the public to suggest that it can be accomplished more quickly. Unless Parliament is strong enough, patient enough and dignified enough to pursue over a long period of time a national object of this prime importance, it would be far better to do nothing and to admit that the capacity for designed and concerted action no longer resides among us. [An HON. MEMBER: "You have begun late!"] We have begun late. What could we have done when we were fighting the greatest industrial struggle in this country? [Interruption.] What is this we hear from Labour representatives? If these great objects are not worth pursuing because they take 18 months to bring into effect, what prospect is there of achieving any real advance in legislation? If I am to take, as I hope I am not to take, that intemperate and precipitate mood as an indication of the line which the Labour party is going to adopt towards this vast scheme of constructive social reform—a line of mockery, derision and scoffing—then I say that we will advance against you with the utmost vigour. [Interruption.]

Mr. KIRKWOOD: You are threatening us!

Mr. CHURCHILL: I am only threatening the hon. Gentleman to use my constitutional rights against him, as he may use his against me. At any rate, I am quite sure that hon. Gentlemen will really do well to address their minds to this subject, and hear what is the position
that they will have to meet. They will either have to support this policy or oppose it. They had better hear what it is, and then they will know what course it will be best for them to adopt. If I have been led by interruptions from the even tenor of my way into a more controversial vein, I will hasten to recover the highway.
Now I will turn to the first stage, that is to say, the provision of money. The prospective surplus of £5,502,000 is very welcome so far as it goes, but it affords no means of coping with the task before us. I propose, therefore, as a first step, to increase that surplus by carrying forward, by a Clause in the Finance Bill, the £4,239,000 surplus of last year, which by law, in the ordinary circumstances, would be devoted to the further reduction of debt. Such a step is justified, by the exceptional levels of the New Sinking Fund, both in the past year and in the present year, and by numerous respectable precedents to be found in ancient and in modern times. I have them all here, but I will not recite them now. [An HON. MEMBER: "Why not?"] I have a long way to travel, and I have to weigh very carefully every word and argument which I have to offer to the House, and I have already presumed on their patience a great deal. This addition raises the prospective surplus to £9,741,000. This is far too small for the problems which we have to face. I must, therefore, find substantial new revenues. I do not suppose anybody will have much doubt where we ought to turn for that.

IMPORTED OILS DUTY.

During the 19th century the industrial power of our country rested upon the basis of its wonderful coalfields; the 20th century has seen us become increasingly dependent upon imported liquid fuel, scarcely any of which is found inside the British Empire. We paid last year for oil supplies of every kind almost as much as we received for our export of coal. We used to be a source of fuel; we are increasingly becoming a sink, These supplies of foreign liquid fuel are no doubt vital to our industry, but our ever-increasing dependence upon them ought to arouse serious and timely reflection. The scientific utilisation, by liquefaction, pulverisation and other processes, of our vast and magnificent deposits of coal,
constitutes a national object of prime importance. Any policy which tends to promote and accelerate these scientific developments has at least one powerful argument in its favour.

A second series of considerations springs from the relations of road and rail transport. The immense expansion of road transport by motor vehicles is an economic advantage of measureless consequence to the whole industrial life of the nation. Its influence in enriching that internal trade, which so greatly exceeds our external trade, is of incalculable advantage, and nothing must be allowed to restrict this development, so long as it proceeds on a sound economic basis. If, on the other hand, particular classes of road vehicles were found to be receiving undue advantage so that the traffic which would naturally go by rail was artificially diverted to the roads, that would be a wasteful feature which would be eliminated from any well-managed business. We have seen in late years road transport increasingly taking many forms of traffic from the railways. If the road vehicles, which carry these forms of traffic, inflict far more injury on the roads than they pay for, the competition ceases to be fair, and an injury is done to the community at large. It is the duty of the State to hold the balance even between road and rail, and to let the best form of transport win on its merits. No one can say that the balance is even at the present time. The recent vote of the House on the Railway Powers Bills shows conclusively how widespread opinion is on this subject, and how firm and definite it is in Parliamentary circles.

A third set of arguments is involved in the state of the roads themselves. The Road Fund and the local authorities are spending over £50,000,000 a year upon the roads, apart from expenditure out of loans. These roads are already the best in the world, and more is being spent on them in proportion to their length than in any other country. Larger sums are forthcoming, and will be forthcoming, for their upkeep and development every year, and still larger sums are urgently needed. The heavy traffic requires the reconstruction of the whole foundations and many of the bridges of a large proportion of our roads, and the expenditure often reaches £15,000 per mile. Beyond cer-
tain limits and degrees, this process would grow out of proportion to the national well-being. We have only a limited fund of capital to employ every year in every direction, and it would not be in the public interest—and this is one of the foundations of my argument—to spend in the next few years several hundreds of millions of additional money upon our roads, apart from the present grants upon the roads, if the result were to render artificially and prematurely obsolete the splendid British railway systems which represent a thousand million pounds of national capital, and afford employment to nearly 700,000 men. We need both road and rail communications, and it is the task of Parliament to regulate the relations between them in a true proportion, having regard to their competing interests and to bring those competing interests into harmony with the general interest.

From every side the local authorities complain of the burden cast upon them by the rapidly increasing motor traffic, especially the heavy motor traffic. They appeal for ever greater assistance from the State as represented by the Road Fund and the Exchequer, and they regard the impending arrival of the railway companies upon the roads, however just that permission may be, as likely to add to their burdens. In addition to this, we have a vast, ever swelling mass of buoyant pleasure traffic, or convenience traffic, born of the delights of speed and movement, and the facilities of business and trade which are so striking a feature of the modern age. Weighing the issue between coal and oil, and weighing the issues between road and rail, and contrasting the rapidly expanding pleasure traffic with the depressed and struggling condition of our basic industries, the Government have come to the conclusion that a new duty should be imposed upon certain kinds of imported oils. The fruits of this tax are not required to pay for the ordinary expenses of governing the country. The whole yield, and more than the whole yield, will be devoted to the relief of other burdens. But the burdens will be differently and, we think, more sensibly and more justly distributed. The new tax will be upon what are called the lighter hydrocarbon oils which are imported or are derived from imported materials. I am advised that there is no difficulty in establishing a chemical frontier between the light and heavy oils.
The Government Chemist, assisted by other distinguished scientists, has devised a formula which will be set out textually in the Resolutions which are to be submitted to the Committee to-night, and which, I believe, will be found to be completely satisfactory. This formula will cover not only petrol but other forms of motor spirit, kerosene and white spirit. It excludes the heavy oils which are known as fuel oil, Diesel oil and gas oil. A most important reason for excluding these heavy oils is that any addition to their price, which is very low, would so greatly restrict their use as to cause economic disturbance out of all proportion to the revenue involved. The formula also excludes lubricating oils, which it would be difficult to differentiate for fiscal purposes, though they could well bear the tax, from the other heavy oils I have mentioned. Therefore we confine ourselves to the light hydrocarbon oils. In the main those are used for motor transport, for various industrial purposes, and for the lighting and heating of public places and the dwellings of all classes. The Duty will be extended to one single vegetable oil, that is to say turpentine, which is in active competition with white spirit. As the imposition of such a tax on kerosene will affect all classes of consumers I shall, before I conclude, propose a relief on another article of popular consumption which will compensate the domestic user of kerosene for the tax put upon him. But I will speak of that in its proper place.

To return to the main tax. A tax on the thousand million gallons of light oils now imported or derived from imported materials would amount in the first full year of collection, that is to say 1029, to about £4,500,000 for every penny on the gallon. We have been advised by high authorities whom we have consulted that to put a tax of 4d. on these light oils would not prevent the rapid progressive increase of consumption which has been a marked feature of recent years. The extraordinary fall in price which has marked the last five years, and particularly 1927, renders the moment for imposing the tax singularly opportune. In five years the retail price of Number 1 motor spirit in London has dropped from 2s. to 1s. 0½d. per gallon. Since the beginning of 1927 alone it has fallen by 5d. Even with petrol at 2s.
the expansion of motor traffic was continuous. I understand that about one, half the present price of petrol is represented by the cost of distribution, and there is every reason to believe that some considerable compression might easily be effected in this field. The fall in price of kerosene is not quite so marked, but nevertheless it is considerable. The wholesale price in London has fallen by 3½d. in the last five years, and by 2½d. in the last 15 months. Therefore, there is no doubt whatever that road transport in all its forms will continue to grow rapidly, and that the consumption of light oils will continue to expand in spite of the tax of 4d. a gallon which we propose to institute. In fact, we are estimating for a substantial, steady increase of consumption year after year.

With the sanction of the Committee the tax will be imposed as from tomorrow. Arrangements have been made by which it will apply simultaneously to all stocks held at the ports and in any of the large tank installations and in the refineries. Stocks under 10,000 gallons in the hands of garages and private individuals will escape. The tax is so devised as to make sure that the business of refining is in no way prejudiced. Refineries will be placed in bond and the duty collected on the products as they leave the premises. All forms of home production from indigenous products will be free from any countervailing excise. That is a most important decision. Thus an undoubted stimulus will be afforded to the production of Scottish shale oil and other British oils—[Interruption]—the shale miners are extremely distressed—to benzol and liquid fuel manufactured by all the new scientific processes from British coal. This advantage may rapidly produce important results. I shall say no more than that, because these processes are still in an unproved state. The addition of 4d. gives effectual protection—that is what it comes to—to this great home industry, exactly as we have done in regard to beet sugar. This 4d. will have a very great effect in bridging the gap between scientific production, which is now perfectly possible on the large scale, of oil from coal and commercial production, which has not yet been achieved. All oil used afloat in the fishing fleets,
whether for deep-sea or inshore fishing, will be free. Further, the tax upon light oils used in agricultural tractors, of which there are 23,000, for the purpose of tillage and only for the purpose of tillage in all its stages—not stationary engines, I cannot frank them, the leakage would be too great—will be remitted.

It is estimated that a duty of this character at the rate of 4d. on light oils will yield in the financial year 1928 £14,000,000, and in 1929 £17,800,000, and that thereafter the revenue from it will rise year by year by about £1,250,000 a year. These are net figures after allowing for Northern Ireland's share of the new revenue and after allowing for the exemptions I have just mentioned. The new revenue derived from this tax, together with the ordinary surplus this year, will supply the means for the rating reliefs to productive industries. I have explained those reliefs, and how they cannot come into operation before the second rate payment of 1929, that is to say, in October of that year. I am thus, and I would like the Committee to follow this, collecting the whole revenue of this year and of 1929 whereas I shall only have to pay out half of the relief in the latter year. I will return to this point later on, but I will, before I sit down, give the Committee the best estimate I have been able to make of the new revenue and of the outgoings. But there are several matters to he disposed of before that point is reached.

HON. MEMBERS: Adjourn.

The DEPUTY-CHAIRMAN (Captain FitzRoy): I am in the hands of the Committee. If the Committee wish to adjourn I am ready to do so.

HON. MEMBERS: Adjourn.

Sitting suspended at Five Minutes before Six o'Clock until half after Six o'Clock.

On resuming—

Mr. CHURCHILL: A short time ago, just before the Committee were kind enough to adjourn in order to allow me an interval—and I desire to express my appreciation of their courtesy in so doing—I was explaining that this tax on light hydrocarbon oils directly affects the
general householder and I mentioned that I contemplated announcing later on a compensating relief on another article of popular consumption, with which I am now going to deal.

REDUCED SUGAR DUTIES.

In order to balance the extra fiscal burden which this tax on kerosene may throw upon the consumer, I propose to reduce the existing duties on sugar in a way which will ensure, it is true a small reduction, but still an appreciable reduction, of ¼d. per lb. in retail prices. The precise changes proposed in the Sugar Duties will be found set out in detail in the White Paper. In brief, I propose to reduce the duties on all imported sugars of a polarisation not exceeding 98 degrees in the case of foreign sugar, and not exceeding 99 degrees in the case of home-grown and Empire sugar all these being usually described as raw sugars, by the equivalent of ¼d. per lb., and on home grown and Empire white or refined sugar I propose a reduction of a slightly smaller amount. Foreign white or relined sugar with a polarisation of over 98 degrees will continue to pay the existing duty. By this means it is also possible to afford assistance to the British sugar refining industry. The Committee are aware that the refiners have long complained that while Empire sugar producers have been assisted by the preference on sugar, and while the home-grown beet industry has been helped by the subsidy as well as by the preference, they themselves, the British refiners, have been left to engage without assistance in an unequal struggle against their competitors, whether domestic, Empire, or foreign. They and their workpeople have certainly suffered considerably in the process—a quarter of them have lost their employment in the last four years.

The new scheme of duties is designed to encourage the importation of raw sugar, which must undergo a refining operation in this country, rather than the importation of the white sugar which is refined abroad. The British refiners have undertaken that if this scheme is accepted by the Committee, the normal difference between the prices of raw and refined sugar will be reduced by the full equivalent of the duty reduction, namely, 2s. 4d. a cwt—that is ¼d. a pound. Since these refiners will
largely influence the market here, I am led to believe that the retail price of sugar will fall by that amount. The change in duty will take effect from tomorrow. The estimate of the cost to the Exchequer is £2,300,000 this year and £2,900,000 in a full year. The reduction of price ought to reach the consumer in a few days. I may add that an all-round reduction of the Sugar Duty equivalent to a ¼d. a 1b. would have cost the Exchequer £4,000,000 a year and that this £4,000,000 a year is the true measure of the relief to the consumer. This is more than is exacted by the tax on kerosene over the whole field of its use, industrial as well as domestic. I have done the best I can in that sphere.

I want to be quite plain with the Committee, because we are at the beginning of long arguments, and perhaps hotly pressed controversy, and I want to start quite fairly. I am not going to hazard any prediction about future price movements, either of sugar or of kerosene. I do not know how the world markets will move. No one knows. All I know is that just as the tax on kerosene will continue to be an adverse factor in the price to the British consumer, so the sugar remission will be a favourable factor in the price to the British consumer, and I believe that they balance each other.

MOTOR VEHICLE DUTIES.

To return to the Oil Duty, the private motorists will naturally be disappointed that the only reply of His Majesty's Government to a widely signed petition, alleged to carry over 900,000 signatures, advocating the substitution of a petrol tax for the existing licence duties should be a new petrol tax in addition. I have tried my best to see if a partial substitution of an extra petrol duty above the 4d. could be introduced in place of the horse-power tax, or part of the horse-power tax, and I have considered carefully whether such an extra duty could be superimposed upon the new Oil Duty, which of course is required for the central purposes of the State. I close no door upon the future. I know well how in many ways it would be advantageous to the export of motor cars to our Dominions, but I am sure this cannot be done now. The complica-
tions are enormous, and so are the differences of opinion. By no means is it to be supposed that there is only one opinion in the matter, even as to the increase of British cars and their exportation. It may well be that we gain as well as lose by the present situation, and the motor manufacturers themselves speak no longer with any decided voice upon the point. The burden upon commercial vehicles would be raised so sharply and heavily that a real shock might be given to a new and already indispensable agency in our economic life. There is not the Parliamentary time this Session for carrying such an intricate and delicate change.

Far more complicated than the Oil Duty of 4d., with only the two rebates I have mentioned to fishermen and agricultural tractors, a separate petrol duty levied for road purposes involves a new chemical frontier much more complicated than the one that divides the light oils from the heavy, and in addition involves a rebate to all who use petrol for any other purpose than motor transport—and they are very numerous, painters, cleaners and so forth. It is a highly complicated matter. I cannot undertake it in the present financial year. I am already putting a very heavy strain upon the Customs and Excise officials, and I do not wish to add to that at present. It might well seriously endanger the efficiency of the very important labours which now have to be carried out. I will not therefore discuss the merits of the proposal to-day, but I believe the motoring community, who are neither the least fortunate nor the least patriotic element in the nation, and who have been so greatly favoured by the downward movement of petrol prices, will not judge the issue from a narrow standpoint. I hope they will consider the plan and the policy of the Budget as a whole and form their opinion as citizens and not as motorists.

It is a part of the main argument I am submitting that heavy vehicles that run almost continuously upon the roads do not at present pay their proper economic share of road maintenance. The 4d. Oil Duty will fall appreciably upon them, and I stand here to argue that it ought so to fall, but I am anxious to reduce the additional burden to limits
which do not impede the healthy development of this invaluable means of internal communication. The Minister of Transport, whose abolition we decreed last year, but who is happily still with us, has therefore, in consultation with me and with the approval of the Prime Minister, prepared a series of mitigating reductions of the licence duties upon the goods and hackney vehicles. They are only mitigations because they ought to pay more, and they are going to pay more, hut not to the full extent of the duty.

I will not detain the Committee by explaining the details at present. They will be set forth in the White Paper which will be available to-night. The essence of them is that there will be reductions in the licence duties on the lighter goods vehicles and hackney vehicles, and there will be in addition a 20 per cent. rebate of licence duty allowable for all heavy vehicles provided they are fitted with pneumatic instead of solid tyres. The Minister of Transport will take an early opportunity in the Debates on the Finance Bill of telling this part of the story. I will content myself now with saying that these mitigations are expensive. They will cost £800,000 in the present year and £1,250,000 next year. I have undertaken that the Exchequer should share the cost of these reliefs with the Road Fund; in fact, I propose to restore a portion of those funds which two years ago were transferred by me to my account, and to assume for the Exchequer the liability for the £600,000 grant to local authorities in lieu of the old carriage licences which at present is charged on the share of the motor taxes which goes to the Road Fund. The rest of the money for this remission will be provided by the Road Fund. There is also a subsidiary provision about certain kinds of trailer vehicles. With this my right hon. Friend will deal when the time comes. All these changes will take effect as from let January, 1929.

DERATING OF PRODUCTIVE INDUSTRY.

So far we have been journeying in the wilderness of preparation. We now begin to reach the fertile and agreeable regions of rating relief. I am speaking, of course, not of the general reduction
of rates which we believe will follow the main Local Government Bill of my right hon. Friend in the winter in consequence of this new system, but I am speaking of the special relief which is to be given to the producer, manufacturing and agricultural. I have said we shall concentrate our relief on the producer. These reliefs will be afforded in two ways. They will be afforded directly by reduction of rates upon premises used for the purposes of production. They will be afforded indirectly by the reduction of the rate burden upon the freight carrying railways, the canals, harbours and docks. In the latter case, however, the case of the railways, etc., the relief will only be afforded conditionally on those undertakings making equivalent reductions in their transport charges wherever practicable. The public utility undertakings—gas, electricity and water—are outside the scheme. For long we debated whether they should be in or out, but we came to the definite conclusion that they should remain outside. But with these exceptions any building or other property used for the purposes of production by means of manual labour will be included in the proposed relief—production not distribution. On the other hand, such buildings or parts of buildings as offices and residences lie outside the score of the relief. The object of the Valuation (Ascertainment) Bill, to which I have already twice referred, which will speedily follow the Budget Resolutions, is to separate one class of property from the other. The precise and formal definition of productive property will be set forth in this Bill.

Mr. MacLAREN: A difficult task.

Mr. CHURCHILL: It is complicated and difficult but soluble and solved in our Bill. I am speaking in the more general terms which are appropriate in making a first presentation of this policy to Parliament. The properties which are to receive derating relief comprise every form of productive industry from the heaviest basic to the most complex and highly-finished forms, from the most prosperous to the most suffering, and, in addition, they comprise the freight-carrying railways, the canals, the harbours and docks. In the aggregate, these undertakings provide the means of livelihood for about 10,000,000 wage-earners.
Over the whole of this area it is proposed at the rate payment of October, 1929, to reduce the local rates by three-quarters. The remaining quarter is left, not in derogation of the principle which we affirm that the tools and plants of production ought not to be subject to taxation, but only the profits arising from their use—the remaining quarter is left in recognition of the importance of preserving some connection between local industry and local fortunes in order that the local authority and local manufacturers may have some interest in common and take an interest in each other's welfare.
I have said that three-quarters of the rates on productive industry will be remitted in the rate payment of October, 1929. But the case of agriculture is exceptional. The operations of the successive Agricultural Rates Acts have already relieved agriculture of three-quarters of the rates upon farm lands and buildings. Parliament has for many years, and under Governments of every party, recognised the special claims of agriculture; and we certainly do not propose that they should be obliterated now. Farm lands and buildings will, therefore, from and in October, 1929, that is, after the rate payment of April, 1929, be at once completely and permanently relieved of all rates. The farmer will continue, of course, to pay rates on his residence in the ordinary way; but so far as agricultural production is concerned, he will be entirely free. There will be no chance of rates being raised upon him for any cause or in any district. The whole business of assessment and re-assessment, as far as he is concerned, comes to a final end. Out's out. To him, after the middle of next year, the rates are dead, and, as the poet said, "Stone dead hath no fellow."
Separate arrangements will be required for Scotland, where the incidence of rates and the general conditions differ in important respects from those o England and Wales. I will not complicate my statement with a description of these special and separate provisions. My right hon. Friend the Secretary of State for Scotland will take an early opportunity in the course of the Debate which will arise on this subject of dealing with them in detail, and also, no doubt, of explaining the provisions to those Members who are more directly concerned in the affairs of the Northern people.
To return to the main problem—and I shall not keep the House much longer—our object is to impart a real stimulus to the basic industries and to production generally. In addition, therefore, to the direct relief to be given by the three-quarters of the rates which are to be remitted in the case of productive industry, there will be given the further impetus of a reduction of railway and canal freights and of dock and harbour dues. I use the expression "railway freights" in order to avoid confusion with the expression "local rates"; and I recommend this vocabulary to those who take part in these lengthy discussions, otherwise time and trouble will be wasted. If the rating relief to the railways, which is to be passed on by them, were merely spread over the whole volume of traffic, it would be beneficial, but it would not cut deep enough to achieve our purpose. It is really no good taking all the trouble and running all the risk and facing all the expense which this policy entails unless you are going to cut deep enough to produce a definite result. We have, therefore, decided to propose to Parliament and to the nation—because, undoubtedly, this is a matter for general discussion—that the entire rating relief accorded to the railways, amounting, as far as we can at present estimate, certainly to not less than £4,000,000 a year, shall be concentrated on certain heavy traffics. One-fifth of the whole of that relief will be given to agriculture. My right hon. Friend the Minister of Agriculture will discuss the detailed apportionment of this gift during the summer with the representatives of that industry—an interesting and, no doubt, at times an exciting task for which his proved courage on the battlefield has rendered him singularly fit. The other four-fifths of the relief will be concentrated upon the following traffics—coal, coke and patent fuel, mining timber, iron stone, iron ore and manganese ore, and limestone for blast furnaces and steel works. That is the whole list. The President of the Board of Trade will, to-morrow, deal more closely with this aspect and will explain to the House more fully than I can now do some of the effects which certainly we do not exaggerate and will not attempt to overstate, but which we hope may produce reductions in the cost of
production in various branches of our industries.
For the present, I will only say that these traffics have been selected for relief out of a whole range of traffics for the following main reasons, which are really a key to the view we take of this problem and to our line of thought on it. First, they will help the industries which employ the largest proportion of manual wage-earners to their business turnover, and which also account for nearly one-quarter of the total unemployment of the country. Secondly, they are to help the traffics to which the alternative of road transport is practically not available. No one can carry coal, or iron, or steel, or fertiliser, or live stock, or feeding stuff in large quantities for long distances regularly and profitably by motor. Therefore, as I have already explained, the heavy producers have no option or true bargaining power. That is the second point. Thirdly, we selected these traffics because practically the whole advantage of them will inure to the benefit of British productive industry. They are carrying British products or carrying the heavy raw material essential for our mining and other heavy businesses. Lastly, these traffics are selected because they either play a vital part in our export trade or lie at the very foundation of our economic well-being.
Let us see what the reliefs will amount to. Broadly speaking, and subject to negotiations which must follow—because it has been only possible to carry this matter a certain distance before it became a matter of public knowledge—subject to the negotiations which must follow on the basis of the tentative estimate of £4,000,000—these reliefs ought to afford a reduction of about 8 per cent. upon the selected traffics. I am assured that this reduction will—apart altogether from the direct rating reliefs—be a valuable aid to the competitive power of all these industries. Here, again, I must reverse the cumulative arguments which I used at the outset of my speech. Coal will have a rate reduction factor. This will benefit the railways who in addition will have their own rate relief. This will be used for reducing freights, and consequently it will cheapen the iron ore which arrives at the steel works, where again the special rate relief
is accorded, and this cumulative relief will be passed on to the shipyard, where it will find the appropriate three-quarters relief. In fact, it will substitute a virtuous circle for the vicious circle. If these basic industries are restored to a prosperous condition, not through the agency of increases of price but through the agency of an increase of true competitive power, the benefit which they will derive will permeate upwards, tier by tier, to every part of our social and economic life, and will come back to us from abroad in the improvement of the balance of our trade.
We make these proposals after much consideration; and we give Parliament and the public the benefit of our considered opinion on what ought to be done. Three out of the four great railways are quite differently affected from the Southern Railway by these selected reliefs on account of the nature of their traffics. These three railways carry far greater quantities of the basic mineral traffics than the Southern, which is more concerned with agriculture. It is a very difficult problem, one of great complexity and delicacy, but nevertheless it, is being solved. In order that the freight advantages may be uniformly operative throughout all parts of the country, it will be necessary for the principal freight-carrying railways to pool both their reliefs from local taxation and the cost of their freight reductions. The railways concerned, I am glad to say, have agreed in principle to this course, and I am indebted to the heads of those great concerns for the trouble and goodwill which they have shown. I informed them at the outset that the principle was that the railways were to get nothing directly out of this relief; they were not to gain and they were not to lose. They are to gain only in the sense that if they carry more traffic as the prosperity of the country improves it will give a stronger assurance of employment to their work-people. But the relief is a relief which they are to pass on to the industries concerned. As to the canals and docks, for various reasons of detail with which I will not weary the Committee to-night, no special machinery is proposed to ensure the passing on of the reliefs. The canals practically follow the railway traffic, and most of the docks and harbours are either on a non-profit basis
or under the control of interests which are concerned in keeping the charges as low as possible.

FINANCE OF RELIEF SCHEME.

7.0 p.m.

Such is the scheme of relief to productive industry. I now return to finance. It will be asked at the outset why, if the payment of relief is not to begin until October, 1929, the new taxation begins now? The reason is that the amount of relief to productive industry plus the additional money required for the concomitant local government reforms will exceed in the early years of the scheme the yield of the new taxation. The sum to be found by the Exchequer is very considerable, and there are still several factors which are unknown. According to the full returns which the local authorities from one end of the country to the other have been good enough to furnish at very short notice, the rates now paid upon productive industry, agricultural and manufacturing, and on railways, canals, docks, harbours, amount to about £34,000,000, constituting about one-fifth of the entire rate revenue. The cost of the complete de-rating of agriculture is about £4,750,000. Three-fourths relief in manufacturing productive industry direct through de-rating, and also through the medium of railways, canals, docks, and harbours, will cost over £21,000,000 a year. £3,000,000 will be required to inaugurate the new scheme of local government. Therefore, the total money to be found by the Exchequer will amount to £29,000,000 a year.

In the face of such a sum, it is necessary for me to accumulate in advance a substantial surplus fund from which the annual yield of the new duties can be supplemented, until with their natural growth the new income is sufficient to meet the outgoings of the Exchequer. I am not prepared to mortgage future Budgets by charges which will deprive me or my successor—for I always think of him—of all means of alleviating the lot of the general taxpayer in the next few years. The finance of the rating scheme is therefore in principle, and, to a very large extent, self-contained. A forecast has been made of this finance up to and including the year 1932. Obviously, the task of measuring the reliefs and forecasting the yield of the new duties four or five years ahead is excep-
tionally difficult, and to publish such calculations is to give unneeded hostages to fortune. But there are some facts resulting from our elaborate calculations which I will offer to the Committee to-night. The new revenue and the Suspensory Fund which will be accumulated before October, 1929, will balance the new outgoings up to the end of the financial year 1931.

A new factor then appears. Rates are at present a deduction for Income Tax purposes under Schedule D. The reduction of three-fourths of the rates on industry will result in a lesser deduction for these purposes than at present, and as the Income Tax slowly follows the events of each successive year, there will be a relief to the Exchequer which, in 1931, will amount to £1,500,000, and in 1932 to £2,500,000. By the end of 1932, allowing for £3,000,000 to bring into effect the changes in the system of local government, but not allowing for the sugar relief or for the motor licence reliefs, which I consider are remissions of taxation from the general revenue, the adverse balance on the working of this scheme will not exceed £4,000,000. Then we shall be nearing the end of the first five-yearly period, and Parliament will be free to review the whole position.

I do not present the finance of this scheme as if it were a sort of enclave in our national finance. I only seem to do so because I wish to show that the future has been studied as searchingly as possible, and that it is not overloaded. There is no intention in practice to keep this Suspensory Fund for the financing of this scheme separate from our general finance. Behind the Suspensory Fund stands the Exchequer, which will throughout gather to itself all the available resources, and make all the necessary payments. I have a further observation to make. Although we shall welcome and hope to profit by the public and Parliamentary discussion which will now begin, nevertheless, in its main features this scheme must be taken as a whole. It is suite impossible for the Exchequer to rescue industry from its position as a mulch cow of local needs by placing itself with its vast resources in the same unhappy plight. We cannot possibly give the reliefs which are needed to industry unless in reimbursing the local authorities, we put ourselves, the
central Exchequer, in a firm and secure financial position. There can, for instance, be no question of a widespread extension of the Agricultural Rates Act policy. There can be no question of giving large sums of public money to local authorities, except as the counterpart of reforms which will benefit the national economy, and of reliefs to industry which will revive the public revenues. You cannot have the new reliefs without the new taxes and the new reforms. No one can take out of this scheme the parts he likes and reject the parts that do not suit him. Everyone who approves of the general plan must take the rough with the smooth, and there is rough as well as smooth in it. All holds together, and while it is no doubt capable of modification in detail, the policy must be supported or opposed, accepted or rejected as a whole.

INCOME TAX (CHILDREN'S ALLOWANCES).

I have now completed my account of the finance and scope of our rating reliefs, and my indication of the local government reforms which will follow in the autumn so far as it is possible to give them at present. I am anxious, however, that the Income Tax payer should not be without some encouragement in the present year. The resources at my disposal do not admit of any reduction in the standard rate. Therefore, I looked to the statutory allowances which affect all sections of the Income Tax payers, although their value is more appreciated by the poorer classes of Income Tax payers. The burden of bringing up a family of young children weighs very heavily upon the smaller class of Income Tax payer, and is not sufficiently discounted by our present legislation. The notable decline in the birth-rate since the War is a convincing witness of the burden upon parents who have young children depending on them. The children's allowance is now £36 for the first child, and £27 for any other. I propose that they shall now be raised to £60 and to £50 respectively. Further, it has always seemed somewhat hard that these allowances are not payable—I think my hon. and gallant Friend the Member for Ripon (Major Hills) made this point last year—in the first year of a child's
life. The expenses of maternity are a serious problem for all small Income Tax payers. So I propose that, in addition to the increase which I have mentioned, we shall make the allowances applicable in the year of the infant's birth. These remissions affect 650,000 households, and, counting spouses, they affect more than 1,000,000 adults. They give a far greater relief to the smaller Income Tax payer who is married and has children than would accrue from large reductions in the standard rate. The wisdom of the ancient Romans and indeed of Julius Cæsar himself, in whom the hon. Member for Silvertown (Mr. Jones) takes so great an interest, assigned to good citizens with three children special privileges in what was called—here I am going to do what I seldom do—quote Latin—jus trium liberorum. This increasing of the children's allowances is another application of our general policy of helping the producer.

I will give a few examples of the effect of these remissions to what everybody will agree is a most deserving class, the small Income Tax payers. I take the Income Tax payer with earned income who is married and has three children. A man with £400 per annum will be freed entirely from tax. A man with £500 per annum will have his tax more than halved, and will get a reduction equivalent to 2s. 9d. reduction in the standard rate. A man with £600 per annum will receive relief equivalent to 1s. 6d. reduction in the standard rate. A man of £700 per annum will receive a reduction equivalent to 1s. 5d. reduction in the standard rate. A man of £800 per annum will receive a reduction equivalent to 1s. 2d. in the standard rate; and even the married man of £1,000 a year with three children will benefit more by this provision than by 8d. reduction in the standard rate. After £1,000 a year the advantage diminishes as the tax scale rises out of all proportion to these basic allowances. Nevertheless, under the sound principle of our Income Tax law all taxpayers with children, the richest as well as the poorest, will share in this benefit. The cost of bringing remissions so substantial to such a great number of people is, I think, surprisingly moderate. It is £2,100,000 in the present year and £4,500,000 in a full year.

FINAL BALANCE SHEET.

It is now possible to balance the Budget of 1928.. With an expenditure stated on the basis of the new form of accounts, of £727,381,000, and a revenue, including £13,200,000 from the Currency Note Reserve, of £761,083,000, my gross total prospective surplus becomes £33,702,000. From this I take £14,000,000, including the £13,200,000 from the Currency Note Reserve, in order to raise the Sinking Fund to £65,000,000. I take £2,300,000 for the farthing off sugar, £2,100,000 for Income Tax relief in respect of the children's allowances, £600,000 for the cost to the Exchequer of the concessions in respect of Motor Licence Duties, and £200,000 for the payment to Northern Ireland in respect of the Oil Duty; thus disposing of £19,200,000; leaving me a margin of £14,502,000, which is to be carried forward in the Suspensory Fund. To this I add, for greater security, last year's surplus of £4,239,000, snaking the total payment to the Suspensory Fund £18,741,000. This will be used either to meet the ordinary unforeseen contingencies of 1928, or later on to make the payments to the local authorities which are involved in our general plan for relieving industry.

I have usually made on these occasions some reference to the year beyond the one with which we are dealing. Last year I had to expect in 1928 a loss of £32,000,000 from windfalls and expedients which are no longer available. That menace exists no more. Reductions of our expenditure and the revival of our revenue have removed it. Our onward journey is no longer overclouded, and the future finance of this country is freer of difficulty and stringency than in any other Budget which it has been my duty to open. Unless some catastrophe on a great scale, for which I can perceive no cause either at home or abroad should plunge us once more into embarrassment, the yield of Income Tax and Super-tax ought to make a stronger revival in 1929 than I am counting on in the present year. The position will be improved by any results achieved by the continuing that policy of economy in detail which, without impairing our social services or endangering the national defence, has been so helpful to us both in 1927 and 1928. If 1928 should, in the prospect of the relief of productive industry and of possibly somewhat easier monetary con-
ditions become a year of slow steady revival of our trade and business—if 1928 should become a year of real advance towards prosperity, in that event the public revenue would immediately reflect the brighter light from the national fortunes. My position in 1929, which is quite uncompromised by this larger scheme, might well be the least unsatisfactory that I have had yet to cope with in my tenure of the Exchequer. Possibly even there might be the means available then of making some further reliefs in taxation for the benefit of all classes.

I am very grateful to the Committee for having allowed me to trench so deeply on their patience and attention. I have had not only to deal with the finance of the year, but also to outline and inaugurate a policy which will absorb the remaining energies of this Parliament, and upon which, before it is completed, the judgment of the electorate will be pronounced. In such a situation controversy is inevitable and it must be faced with vigorous conviction. It is to no light or entirely popular task that His Majesty's Government invite and summon the House of Commons. It is a task that will require exacting labours from all, wherever they may sit, who wish to bear a worthy share in it. Opinions will differ as to whether it will prosper the interests of this party or that, but that these great measures of relief to productive industry and of the modernising of our system of local government are urgent and necessary for the national well-being—of that we are sure; and if they should be carried into law, as we do not doubt they will be, they will win for this present Assembly some honourable distinction among the Parliaments of our time.

CUSTOMS AND EXCISE.

CONTINUATION OF DUTY ON TEA (CUSTOMS).

Motion made, and Question proposed,
That the Customs duty chargeable on tea until the first day of August, nineteen hundred and twenty-eight, shall continue to be charged on and after that date until the first day of August, nineteen hundred and twenty-nine, that is to say:
Tea, the 1b. … … fourpence.
And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."—[Mr. Churchill.]

Mr. SNOWDEN: The position of anyone who follows the Chancellor of the Exchequer on the introduction of the Budget is always a very difficult one. On this occasion it is unusually so. The right hon. Gentleman has covered immense ground during the last three hours. I think there has been no Budget since the memorable Budget of 1909 which is likely to provoke so much discussion and controversy as the one which the right hon. Gentleman has just introduced. It would be an intolerable infliction upon the Committee if I were to ask for more than a very few moments at this stage, for Members of the Committee have listened with keen and concentrated attention for so long, and the nature of the proposals that the right hon. Gentleman has submitted do not lend themselves to immediate comment or discussion. Fortunately we shall have opportunities later for dealing with the matter in detail. My first duty to-day is a very pleasant one. I am sure that the right hon. Gentleman will believe that I am sincere when I say that I congratulate him upon occupying a happier position this year than he has done on the last two occasions; and I am sure that I speak in the name of every Member of the Committee when I offer him our hearty congratulations on the brilliant way in which he has introduced his Budget. It has not only been a great physical effort, but, like all the right hon. Gentleman's speeches, it has been a most scintillating effort.
I shall not attempt now to comment upon any of the proposals that the Chancellor has made. However, I may say this—that there have been very few surprises in this Budget. I think that every one of the proposals he has put forward had been anticipated, with perhaps the exception of the change in the Sinking Fund. That fact is largely duo to the other fact that the Chancellor of the Exchequer has himself been giving the Budget piecemeal in speeches and to deputations during the last month. We ought not to begrudge praise and credit where praise and credit are due. Therefore, where I think the right hon. Gentleman is doing a wise thing I shall commend him for his action. There are two or three things in the Budget about which, without further consideration, one may express a definite view. The first is the proposed new form of the accounts.
The taking out of the remunerative and self-supporting services from the accounts of revenue and expenditure is a reform for which Members have long been desirous. I thank the right hon. Gentleman and congratulate him on having had an opportunity to carry out this very desirable improvement. The question of the fixed sum for debt charges is so very complicated that I shall not say more about it at the moment than that, as far as I can understand the figures submitted by the Chancellor of the Exchequer, I doubt whether he is proposing any addition at all to the Sinking Fund.
As to the rating proposal, everybody realises the importance of this question. I heartily subscribe to everything that the right hon. Gentleman said in the earlier part of his observations to-night. I really thought at that time that he was repeating one of the many speeches—to use his own phrase, the speeches that he gave by the yard—when he was Member for Dundee, about the taxation of land values. Without committing ourselves at this stage to support of any of the detailed proposals the Chancellor of the Exchequer has made, I can assure him that we shall give the matter our very serious consideration and support him where we think support is justifiable. I think there will be general regret in the country that the relief of local rates has to be postponed for something like 18 months. It is hardly likely that the right hon. Gentleman opposite will be sitting on the Treasury Bench at that time. There is never very much gratitude in politics, and I do not know to whom the gratitude will go, whether it will be the right hon. Gentleman for the proposal or his successor who gives practical effect to it.
A word about the Petrol Duty. Perhaps the effect that is likely to come from the imposition of this duty will be to put an end for all time to the worry which every Chancellor of the Exchequer experiences within a couple of months or so from the introduction of the Budget through the appeals that are made to him for relief from taxation. The Chancellor of the Exchequer has been pestered to reduce the tax on motor cars, and the result of all this pressure and the outcome of all the interviews is that he proposes practically to
double the amount of the tax on the motorist. The right hon. Gentleman is making a slight reduction in the duty upon sugar, but I do not attach the least value to his assurance that he has received from the sugar refiners that the reduction will be passed on to the consumer in the form of reduction in price. It is really no reduction in the amount of taxation which is paid by the consumer, because the right hon. Gentleman himself stated that he was making the reduction as compensation for the increase of taxation upon the consumer in other ways.
I welcome the last item which the Chancellor of the Exchequer announced, namely, the increase in the allowance for children. One of the regrets that I had, and I had not many regrets, was that I had not the time to carry out this reform. I did, however, announce that I intended in the following year to carry out that reform. We are much obliged to the Chancellor of the Exchequer for having carried it out in this Budget, and I am certain that it will be welcomed and appreciated as a boon by a considerable number of deserving people. I would repeat the congratulations of the Committee to the Chancellor of the Exchequer upon a very brilliant achievement, by which he has added one more to his many great Parliamentary triumphs.

Mr. LLOYD GEORGE: I propose to follow the example of the ex-Chancellor of the Exchequer, the right hon. Member for Colne Valley (Mr. Snowden) by refraining at this stage from any attempt to examine the highly important, far-reaching, and complicated proposals which have been placed before the House by the Chancellor of the Exchequer. I would like to join in congratulating the Chancellor of the Exchequer upon the lucidity and dexterity with which he presented the Budget statement. It was a very brilliant performance and one which I admire very much. It was with great delight that the House listened to it; in spite of the fact that the speech occupied over three hours there was not a single moment when anyone of us gave the slightest symptoms of being bored. I also join with my right hon. Friend the Member for Colne Valley in saying how delighted I am that the Chancellor of the Exchequer has extended what was
known in my day as the brat's allowance. I refer to the allowance in respect of children. I had the honour of initiating that scheme. It has been extended very considerably by succeeding Chancellors of the Exchequer, and I am very glad that the present Chancellor has gone a little further in that direction.
The dominant and most important factor of the Budget is the proposals dealing with rating. There is general agreement that that problem is long overdue for solution and that something ought to be done. I am not criticising the Chancellor of the Exchequer that he did not attempt it before. There is a good deal to be said for his point of view that it was very difficult to do it earlier. In every quarter of the House there is a feeling that something ought to be done on a very considerable scale to relieve the burdens upon industry. Criticisms, in so far as there will be criticisms, will be directed against the methods by which the Chancellor of the Exchequer is proposing to pursue an object which is common to all parties in the House. I am very glad that he has invited criticism and that he has invited the cooperation of the House of Commons. It would be unusual for me at this stage to point out what is passing through my mind, but, as the right hon. Gentleman well knows, this is a problem to which I have devoted a good deal of attention, and he has this afternoon directed attention to a report which some of us made sonic time ago, in which we made definite proposals. When I was Chancellor of the Exchequer I was faced with the same problem, and it is one of the most baffling of problems.
If the Chancellor of the Exchequer finds that the criticisms against his method are sound, I hope he will not allow any pride of parentage to make him obstinate and stubborn in insisting upon the course which he has taken. The cash is all right; it is the question of the method of applying it upon which we may differ. His method, which will require a good deal of justification, is to confine the relief to the ratepayers who contribute one-fourth, roughly, of the rates in this country, while those who contribute three-fourths of the rates are not only to get no relief but in some respects there will be burdens added to them. More than that, there can be no
doubt that this means putting off relief so far as the Income Tax payer is concerned. There is no relief in prospect for him. In so far as I understood the Chancellor of the Exchequer, he is budgeting for something which may be a deficit years hence when he has exhausted his suspensory fund. If it does not become a deficit it will be due entirely to the fact that the Income Tax payer has contributed more.
Before the House of Commons commits itself to the proposition of making three-fourths of the ratepayers pay for giving relief to one-fourth, I hope it will listen to alternative schemes, and not listen in a smiling spirit to every counter-proposition that is made. The House of Commons is the great Committee of Supply, the Committee of the realm for considering the raising and the spending of money, and the Chancellor of the Exchequer, as a Constitutionalist, has invited the House to consider the matter. He has not ruled out other possible alternatives. I hope he will consider very carefully before he weds himself to the present scheme—and I make the same appeal to the Minister of Health, who, I have no doubt, will have a good deal to do with the fashioning of this scheme—to consider whether there is not a better method of spending this money in such a way as to distribute it more fairly over all classes of the community, instead of ruling out more than three-fourths of the population while conferring the whole of the benefits on the minority. That is one of the questions which I propose to elaborate to-morrow; this is not the time to do it. I will not say that the Committee are exhausted, but hon. Members are very full of the scheme which has been presented by the Chancellor of the Exchequer and they want time to think over it. To-morrow, with the permission of the Committee, I propose to elaborate some of the criticisms which occur to me. For the moment, I confine myself once more to congratulating whole-heartedly the Chancellor of the Exchequer upon an exceedingly fine performance.

Miss LAWRENCE: I begin by saying with what pleasure I listened to the speech of the Chancellor of the Exchequer. When I heard him detail the difficulties of our rating system and analyse the hardship which the rating system in-
flicts and the harm to industry from burdensome rates, I felt that it was the sort of speech which I had been trying myself to make for six years. But I woke up from my dream. Our speeches have always begun, not so well or so perfectly phrased as the speech of the Chancellor of the Exchequer, with reference to the injury to industry. Then we have gone on to speak of the injury to commerce caused by the unequal incidence of rates, and we have pointed out that it was extremely hard for the householder in one district to have to pay rates of 30s. in the pound, while in another district another householder had to pay only 5s. in the pound rates for the enjoyment of the same social services. We have pointed out that it is not this, that, or the other class which is suffering from the effects of the burdensome rates, but that it is this, that, or the other district which is suffering. We have pointed out that the centre of this problem was not so much that manufacturers everywhere had suffered, but that in some unfortunate places all were suffering, manufacturers, commercial men, householders. That fact constitutes one of the difficulties which confronts us in connection with the housing problem. That is of the essence of the problem. It is not the ratepayers generally who are suffering, but the overburdened ratepayers in certain districts who are suffering, and that is why, as the Chancellor of the Exchequer said, industry flies from sonic localities, and it is impossible to obtain fresh industries in the depressed districts.
The scheme of giving manufacturers a three-fourths remission of rates will not do anything to bring new industries to the depressed districts. One district will still have a heavy rate while in another district a manufacturer will have only a small rate to pay. The difficulties which make it impossible for new industries to spring up in the necessitous areas, the difficulties of housing, the difficulties of transference of population will exist just in the same way under the new scheme as at the present time, because manufacturers in the necessitous areas will have to pay the disproportionate burden which exists as compared with other districts. When we analyse this problem we say that the essential part of it is the inequality between districts. Some districts are perfectly happy and do not need any relief at all, while other districts are
so broken down with their rates that they cannot possibly get any further forward. The necessitous areas are, unfortunately, the areas where the burden of unemployment and destitution is the greatest. That is what is the matter with the rating system of the country. Industry flies from necessitous areas with rates of 30s. in the pound because in those districts the burden of maintaining the poor is breaking the backs of manufacturers and householders and stifling local enterprise. It appears to me a mere waste of public money to relieve one class in all districts indiscriminately. If a man is paying 5s. or 6s. in the pound in rates he is lucky, whether he is a manufacturer or householder, but if he has to pay 30s. in the pound he wants a good deal, and we are simply squandering our resources if we relieve one class independently of the actual burden borne by the individual.
Therefore, looking at the problem as a whole, the Labour party has fixed its mind on what is the matter with the overrated districts, namely, the fact that one particular burden has been swollen out of all proportion to local resources. We say that what is needed for industry and householders is to take the burden of the unemployed off the shoulders of the locality and place it on the State. That is the fundamental principle of our policy. Coupled with that, we say that the necessitous areas should receive some additional relief. What are we going to do by the scheme in the Budget? What good will it be to the people of Monmouthshire or Durham to make the county responsible? The county is as poor as the localities, and to substitute for their present income the income given them by the State, under stiffer conditions, will be to destroy the autonomy of local authorities. This is the intrinsic fault of the Budget. It looks upon classes and not upon districts. What is necessary is geographical relief. It is necessary to remove the specific burden which is breaking the back of the localities. If we spent the same amount of money more profitably, not by scattering relief all over the country whether it is wanted or not, we could do much for industry and social services in those localities which need it most. The more the plan of the Labour party is examined, it will be found more scientific, more just and a more effective way of dealing with the burden of the necessitous areas.

Question put, and agreed to.

HYDROCARBON OILS.

Resolved,
That—
(1) there shall, subject as hereinafter provided, be charged—

(a) on all petroleum oils, coal tar and oils produced from coal, shale, peat or any other bituminous substance and all liquid hydrocarbons imported into Great Britain or Northern Ireland on or after the twenty-fifth day of April, nineteen hundred and twenty-eight, or so imported before that date but landed therein on or after that date, a customs duty at the rate of fourpence a gallon;
(b) on all petroleum oils which on the twenty-fifth day of April, nineteen hundred and twenty-eight, are in the ownership or possession of any person who holds more than ten thousand gallons thereof, but not including any such oils which are shown to the Commissioners of Customs and Excise to have been intended for use by the person in whose ownership or possession they were and not for sale and to have been used by that person before the first day of May, nineteen hundred and twenty-eight, an excise duty at the rate of fourpence a gallon:

Provided that a rebate at the rate of fourpence a gallon shall be allowed from the aforesaid duty of customs or excise, as the case may be, on the delivery for borne consumption of any hydrocarbon oils other than oils of which forty per cent. or more by volume distils at a temperature not exceeding two hundred and thirty-five degrees centigrade:
(2) In the case of any hydrocarbon oils in or removed to a refinery, the foregoing duties shall be charged on the delivery of any article from the refinery and shall be the same as those payable on like articles on importation, and there shall be allowed the same rebate as would he allowed on importation.

SUGAR (CUSTOMS).

Resolved,
That on and after the twenty-fifth day of April, nineteen hundred and twenty-eight—
(a) In lieu of the full duties of Customs now chargeable on sugar of a polarisation not exceeding ninety-eight degrees there shall be charged the following reduced duties:



s.
d.


Sugar of a polarisation exceeding ninety-seven and not exceeding ninety-eight degrees the cwt.
8
7


Sugar of a polarisation not exceeding seventy-six degrees the cwt.
4
6


and intermediate duties varying between 4s. 6d. and 8si 7d. on sugar of a polarisation exceeding seventy-six degrees and not exceeding ninety-seven degrees:

(b In lieu of the rate now chargeable the preferential rate of Customs duty chargeable in respect of sugar of a polarisation exceeding ninety-eight degrees shall be the full rate of Customs duty for the time being in force reduced by the amounts following:



s.
d.


If the polarisation does not exceed ninety-nine degrees the cwt.
6
10.8


If the polarisation exceeds ninety-nine degrees the cwt.
5
10

(c) For the existing amounts of the reductions to be made for arriving at the preferential rates of duty chargeable in respect of molasses, glucose and saccharin there shall he substituted the increased reductions following, that is to say:




s.
d.


Molasses (including all sugar and extracts from sugar which cannot be completely tested by the polariscope) if the sweetening matter contained therein—




Amounts to 70 per cent. or upwards
the cwt.
3
8½


Exceeds 50 per cent. but does not amount to 70 per cent.
the cwt.
2
8


Does not exceed 150 per cent.
the cwt.
1
3½


Glucose—


Solid
the cwt.
3
8½


Liquid
the cwt.
3
8


Saccharin
the ounce
1
10½

Provided that in the application of this Resolution to any duty chargeable on manufactured or prepared goods under Section seven of the Finance Act, 1901. the first clay of July shall be substituted for the twenty-fifth day of April.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect tinder the provisions of the Provisional Collection of Taxes Act, 1913."

SUGAR (DRAWBACKS AND ALLOWANCES).

Resolved,
That, on and after the twenty-fifth day of April, nineteen hundred and twenty-eight, drawbacks and allowances in the following cases shall be allowed and made in accordance with the following provisions in substitution for the drawbacks and allowances which may now be allowed and made in the like cases.

Provided that—

(a) the reduction of the rates of any drawbacks and allowances shall not have effect in relation to any goods as respects which it is shown to the satisfaction of the Commissioners of Customs and Excise that duty was paid at the rates in force before the twenty-fifth day of April, nineteen hundred and twenty-eight:
(b) the grant of a specified amount of drawback in respect of a specified weight of any article includes the grant
884
of a proportionately less amount of drawback in respect of any less weight.

A. Drawbacks on Sugar.

In the case of Duty-paid Sugar (including Sugar produced from Duty-paid Sugar or Molasses) which has passed a Refinery in Great Britain or Northern Ireland—

Drawback shall be allowed in accordance with the provisions of the following table:


Nature of Sugar.
Degree of Polarisation.
Rate or Amount of Drawback.


Sugar produced from material on which the full duties of customs have been paid.
Of a polarisation exceeding 98˚.
Where the rate of duty paid was 11s. 8d. the cwt., a drawback at the rate of 11s. 8d. the cwt.




Where a rate of duty less than 11s. 8d. the cwt. was paid, a drawback at the rate of 9s. 4d. the cwt.



Of a polarisation not exceeding 98˚.
A drawback equal to the duty chargeable on sugar of the like polarisation.


Sugar produced from material on which a preferential rate of cu-toms duty or an excise duty has been paid.
Of a polarisation exceeding 99˚.
Where the rate of duty paid was 5s. 10d. the cwt., a drawback at the rate of 5s. 10d. the cwt.




Where a rate less than 5s. 10d. the cwt. has been paid, a drawback at the rate of 5s. 0⅔d. the cwt.



Of a polarisarion not exceeding 99˚.
A drawback equal to the duty chargeable on sugar of the like polarisation.

B. Drawbacks on Malasses.

1. In the case of Molasses (including Sugar and all Extracts from Sugar which cannot be completely tested by the Polariscope) produced in Great Britain or Northern Ireland—

Drawback shall be allowed in accordance with the provisions of the following table in respect of any such molasses which—

(a) is exported or is shipped or deposited in a bonded warehouse for use as ships' stores;
(b) is delivered, subject to the regulations of the Commissioners of Customs and Excise, to a licensed dealer for use in the manufacture of spirits or yeast, or to a person for use in the manufacture of yeast in premises used solely for that purpose;
(c) is used in the brewing of beer deposited in a bonded warehouse for export;
885
(d) appears to the satisfaction of the Treasury to have been used in the manufacture or preparation in Great Britain or Northern Ireland of goods, other than beer, which are exported, or are shipped or deposited in a bonded warehouse for use as ships' stores.

Nature of the Molasses.
Amount of drawback.


Produced from imported material on which the full customs duty has been paid.
Produced from material on which customs duty at a preferential rate or excise duty has been paid.
Produced in a sugar factory in Great Britain and Northern Ireland from beet grown there.


s.
d.
s.
d.



If containing not more than 50 per cent, of sweetening matter and weighing not less than fourteen pounds to the gallon—the cwt.
2
3
1
2½
An amount equal to the duty paid.


If containing more than 50 per cent, but not more than 60 per cent, of sweetening matter—the cwt.
3
4½
1
9½


If containing more than 60 per cent. but not more than 70 per cent, of sweetening matter—the cwt.
4
6
2
5


If containing more than 70 per cent, but not more than 80 per cent, of sweetening matter—the cwt.
6
2
3
4


If containing more than 80 per cent, of sweetening matter—the cwt.
7
0
3
9½

2. In the case of molasses (including sugar and all extracts from sugar which cannot be completely tested by the polariscope) on which duty has been paid on importation—

Drawback of an amount equal to the duty payable on the importation of the molasses shall be allowed in respect of any quantity of any such molasses:—

(a) which is used in the brewing of beer deposited in a bonded warehouse for export;
(b) which appears to the satisfaction of the Treasury to have been used in the manufacture or preparation in Great Britain or Northern Ireland of goods, other than beer, which are exported or are shipped or deposited in a bonded warehouse for use as ships' stores.

C. Allowances on Molasses.

An allowance shall be made in respect of molasses produced in Great Britain or Northern Ireland and used solely for the purpose of food for stock in accordance with the following provisions:—


Nature of Molasses.
Amount of Allowance.


(1) Molasses produced from material on which duty has been paid.
An amount equal to the drawback payable on the exportation of the like article.


(2) Molasses on which an excise duty has been paid.
An amount equal to the duty paid.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the Provisional Collection of Taxes Act, 1913."

BRITISH CINEMATOGRAPH FILMS.

Resolved,
That as from the twenty-eighth day of April, nineteen hundred and twenty-eight, negative cinematograph films which are certified by the Board of Trade to satisfy the requirements of Sub-section (3) of Section twenty-seven of the Cinematograph Films Act, 1927 (which prescribes what films shall be deemed to be British films for the purposes of that Act), and parts of any films so certified, shall, for the purpose of duties of customs chargeable on cinematograph films, be treated as if they were blank film.
And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

BRITISH WINES (EXCISE).

Resolved,
That the rate of the duty of excise now chargeable on sweets shall, on and after the twenty-fifth day of April, nineteen hundred and twenty-eight, be increased to one shilling and sixpence for every gallon.
And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

MECHANICAL LIGHTERS (CUSTOMS).

Resolved,
That as from the twenty-eighth day of April, nineteen hundred and twenty-eight, there shall he charged on the importation into Great Britain or Northern Ireland of any mechanical lighter or of any component part of any such lighter (other than a flint), a customs duty of sixpence.
In this Resolution the expression 'mechanical lighter' means any mechanical or chemical contrivance which is portable and is intended for producing a spark or flame, whether by itself or when brought into contact with gas.

MECHANICAL LIGHTERS (EXCISE).

Resolved,
That as from the twenty-eighth day of April, nineteen hundred and twenty-eight, there shall be charged on every mechanical lighter manufactured in the United Kingdom which is complete or which could be made complete by the addition of a flint, and on every such lighter sent out in an incomplete state from the premises of a manufacturer of such lighters an excise duty of sixpence.
In this Resolution the expression 'mechanical lighter' means any mechanical or chemical contrivance which is portable and is intended for producing a spark or flame, whether by itself or when brought into contact with gas.

BUTTONS.

Resolved,
That during a period of five years beginning on the twenty-eighth day of April, nineteen hundred and twenty-eight, there shall be charged on the importation into Great Britain or Northern Ireland of buttons made of any material, and whether finished or unfinished, of a description commonly used for the fastening or decorating of wearing apparel or household linen, not being buttons forming part of any other article, a duty of customs of an amount equal to thirty-three and one-third per cent. of the value thereof.

Mr. KIRKWOOD: On a point of Order. If there are a number of us calling "No," will you not pay any attention to us? We are going to have a Division.

The DEPUTY-CHAIRMAN: If a sufficient number seriously call "No," I am always prepared to pay attention to them.

LICENCE DUTY ON ARTICULATED MOTOR VEHICLES.

Resolved,
That, as from the first day of January, nineteen hundred and twenty-nine, where a mechanically propelled vehicle used for drawing a trailer has the trailer attached to it by partial super-imposition the vehicle and trailer shall, for the purpose of determining the rate of the licence duty chargeable under the Second Schedule to the Finance Act, 1920, he treated as if they were a singly vehicle used for drawing a trailer.

INCOME TAX (CHARGE OF TAX).

Resolved,
That—
(a) Income Tax for the year 1928–29 shall be charged at the standard rate of four shillings in the pound, and in the
case of an individual whose total income from all sources exceeds two thousand pounds, at the following rates in respect of the excess over two thousand pounds:


For every pound of the first five hundred pounds of the excess.
Four shillings and ninepence.


For every pound of the next five hundred pounds of the excess.
Five shillings.


For every pound of the next one thousand pounds of the excess.
Five shillings and sixpence.


For every pound of the next one thousand pounds of the excess.
Six shillings and threepence.


For every pound of the next one thousand pounds of the excess.
Seven shillings.


For every pound of the next two thousand pounds of the excess.
Seven shillings and sixpence.


For every pound of the next two thousand pounds of the excess.
Eight shillings.


For every pound of the next five thousand pounds of the excess.
Eight shillings and sixpence.


For every pound of the next five thousand pounds of the excess.
Nine shillings.


For every pound of the next ten thousand pounds of the excess.
Nine shillings and sixpence.


For every pound of the remainder of the excess.
Ten shillings.


(b) The same Super-tax shall be charged for the year 1928–29 as was charged for the year 1927–28.
(c) All such enactments as had effect with respect to the Income Tax and Super-tax charged for the year 1927–28, shall, subject to the provisions of any enactments which were expressed to come into operation on the sixth day of April, nineteen hundred and twenty-eight, or to apply in relation to Income Tax or Super-tax for the year beginning on that day, have effect with respect to the Income Tax and Super-tax charged for the year 1928–29.
(d) The annual value of any property which has been adopted for the purpose of Income Tax under Schedules A and B for the year 1927–28 shall be taken as the annual value of that property for the same purpose for the year 1928–29:
Provided that the foregoing provision relating to annual value shall not apply to lands, tenements and hereditaments in the Administrative County of London with respect to which the valuation list under the Valuation (Metropolis) Act, 1869, is by that Act made conclusive for the purposes of Income Tax.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

OLD SINKING FUND.

Resolved,
That the old Sinking Fund for the years ending respectively on the thirty-first day of March, nineteen hundred and twenty-eight, and the thirty-first day of March, nineteen hundred and twenty-nine, shall, instead of being issued to the National Debt Commissioners, be carried to a suspense account for the purpose of being subsequently applied in such manner as Parliament may hereafter determine.

TRANSFER TO EXCHEQUER OF PART OF ASSETS OF CURRENCY NOTE REDEMPTION ACCOUNT.

Resolved,
That such part of the assets belonging to the Currency Note Redemption Account as is, in the opinion of the Treasury, having regard to the market value of those assets, in excess of the requirements of the Account shall at such time as the Treasury determines be realised and the proceeds thereof paid into the Exchequer."—[Mr. Churchill.]

AMENDMENT OF LAW.

Motion made, and Question proposed,
That it is expedient to amend the law relating to the National Debt, Customs and Inland Revenue (including Excise), and to make further provision in connection with finance."—[Mr. Churchill.]

Motion made,, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.—[Commander Eyres Monsell.]

Resolutions to be reported To-morrow.

Committee report Progress; to sit again To-morrow.

The remaining Orders were read, and postponed.

ADJOURNMENT.

Resolved, "That this House do now adjourn."—[Commander Eyres Monsell.]

Adjourned accordingly at Six Minutes after Eight o'Clock.